USD/JPY bias up on the week - Westpac

With the Japanese election date fixed for October 22, all of the obvious risks that this involves given the lessons from other polls in the last 18 months plus the prospects of another fiscal stimulus package mean the ¥ should be pretty low in the list of currencies to own right now, according to Robert Rennie, Research Analyst at Westpac. 

Key Quotes

“With the rates market embracing a December Fed hike (which has been our call through the year) and willing to go along with Trump’s tax plan for now, it does look as if this US$ move has some further legs for now.”

“Thus we shift our USD/JPY bias to up on the week, up on the month but leave it down on 3 months. There remain significant procedural questions over the tax package making us think that USD/JPY should remain capped.”