USD/JPY looks to risk trends for direction – Danske Bank

Chief Analyst at Danske Bank Allan von Mehren noted the pair’s price action should look to the risk appetite trends for the time being.

Key Quotes

“USD/JPY gained and broke above 106.50 yesterday supported by a slight improvement in risk appetite. Short JPY positions have been reduced significantly ahead of the fiscal year-end in Japan and speculative accounts are now close to square in JPY according to the latest IMM data”.

“Hence, while risk sentiment will be directional for USD/JPY this week, positioning is likely to underpin the cross near term”.