USD/JPY: Neutral bias, upside risks are increasing - BTMU

Analysts from The Bank of Tokyo-Mitsubishi UFJ, have a neutral bias in the USD/JPY pair for the next week and expect it to move between 102.50 and 104.50 but see increasing upside risks.

Key Quotes: 

“USD/JPY has stayed narrowly range bound around 104. USD strengthening pressure was not strong, but JPY selling was also not supportive of a USD/JPY rise even well into October.”

“The BoJ’s Sakura Regional Economic Report hinted at JPY strengthening pressure and downgraded the Tokai region’s economic assessment. However USD/JPY has stayed calm even after the start of JPY yield curve control operations by the BoJ. All major JPY markets, USD/JPY, JPY yields and the Nikkei stock index have been calm with low volatility in the past two weeks. Next week JPY buying by exporters may rise further close to the end of month. Simultaneously, JPY selling by Japanese investors may support the lower bound of USD/JPY. USD appreciation might not pick up any further ahead of the US presidential election.”