USD/JPY expected to grind lower – BTMU

Currency Analyst at BTMU Lee Hardman sees the Japanese currency gathering further traction towards year end.

Key Quotes

“The yen has remained relatively stable in the Asian trading session with USD/JPY continuing to trade just above key support at the 100.00-level so far this month. We believe that it is only a matter of time before USD/JPY breaks below the 100.00-level expecting further yen strength heading into year end. The yen was little impacted by the release overnight of the latest Japanese GDP report for Q2”.

“The moderate recovery in domestic demand is expected to continue supported by the government’s material loosening of fiscal policy. In these circumstances, the BoJ is under less pressure to ease monetary policy further unless it concludes in its upcoming comprehensive assessment that it needs to take more decisive action to return inflation to target more quickly. Without a policy surprise from the BoJ, we are comfortable with our view that the stronger yen trend will remain in pace”.