USD/JPY: 3 Possible Scenarios & Strategies For Trading the BoJ – Nomura

USD/JPY jumped to higher levels but then consolidated and slipped in range. What’s next? The meeting of the Bank of Japan awaits markets.

Here is their view, courtesy of eFXdata:

Nomura Research discusses USD/JPY outlook and trading strategies around next week’s BoJ policy meeting. Nomura considers three scenarios into the meeting and examines their implications for JPY.

1) A formal change in monetary policy (0-5% possibility)

“In this tail risk scenario, we would not recommend dip buying soon thereafter, and even shifting to short USD/JPY positions could be attractive,” Nomura argues.

2) Adjustments/tweaks to increase JGB market volatility (10-15% possibility)  

“In this scenario, after the dust settles, we would expect JPY weakness to resume. Thus, dip buying of USD/JPY would be attractive,” Nomura adds.

3) No meaningful adjustment, just more dovish (80-90% possibility)

“Under this scenario, we would expect USD/JPY appreciation to accelerate further, and would maintain our long USD/JPY preference,” Nomura argues.

For lots more FX trades from major banks, sign up to eFXplus

By signing up to eFXplus via the link above, you are directly supporting Forex Crunch.


Leave a Reply

Яндекс.Метрика