Chatter about an extra budget in Japan, and calls for the expanded Bank of Japan asset purchases undermined the JPY, lifting USD/JPY above the 109.00 resistance. Looking ahead, economists at OCBC Bank expect the pair to advance towards the 110.00 level.
Immediate target is at 109.30/40
“USD/JPY lifted above the 109.00 resistance despite the back-end UST yields still looking soggy around the 1.55/60% mark. Domestic headlines – extra budget in 4Q 2021 and calls for more BOJ asset purchases – drove JPY weakness.”
“Our short-term implied valuations still call for the pair to edge higher towards the 110.00 zone, though the immediate target will be 109.30/40.”