VOT Research Desk
Market Analytics and Considerations
The USDJPY has worked hard to create a peak. TD Securities economists predict that the pair will trade under the 140 mark.
FX intervention is probable over 150.
“USDJPY is creating a top,” the statement reads.
“FX intervention is expected above 150.”
We continue to believe that the BOJ intends to keep its currency stable but weak in order to promote inflation pass-through, but a change to the YCC will put downward pressure on the USDJPY.
Rate differential continue to exert significant pressure on USDJPY, but a change to YCC might help to reduce some of that impact in a normally packed trade. Should the yen gain too much strength following the YCC change, we would not rule out FX intervention.
Strategy for trading in the sub-140 range.
