Westpac: Not sure if USD/JPY can rise further
- Westpac Research Fellow Sean Callow said the USD/JPY may be moderate, but the two-month high set this week has inspired West Pacific Bank for a long time. The medium-term view that the US Treasury yield curve continues to rise will attract enough unhedged US Treasury demand, thus supporting the USD/JPY to rebound to the level near the 113-114 region at the end of 2017;
- US 10-year Treasury yields The rate rose to 3.09% this week, the highest since May, supporting the dollar/yen, even though the dollar is struggling against other currencies. However, during the FOMC meeting, the market is still uncertain whether the USD/JPY will rise further, as a fully-priced rate hike sometimes leads to a dollar long profit. The Fed’s “lattice map” will be closely watched;
3)At the same time, the Bank of Japan has seen more similar situations – a very credible commitment to keep the 10-year Japanese government bond yield at around 0%, and quite Unbelievable claims that the purchase of Japanese government bonds will "grow at a rate of about 80 trillion yen per year.
