USD/JPY: Broad 110-114.50 Range; BoJ On Hold Next Week- Danske

Dollar/yen certainly reflected the weakness of the US dollar and also moved up on its recovery. And what about the yen side of the equation? The BOJ triggered a “mini taper tantrum” but will the BOJ really move?

Here is their view, courtesy of eFXnews:

Danske Research discusses its call for next week’s BoJ January policy meeting and USD/JPY outlook.

“We expect the Bank of Japan (BoJ) to maintain its ‘QQE with yield curve control’ policy unchanged at the next monetary policy meeting ending on Tuesday 23 January. We expect governor Kuroda to downplay the significance of daily market operations and repeat BoJ’s commitment to the current yield curve control. We expect the BoJ to keep its policy unchanged in 2018, assuming Kuroda is reappointed when his term ends in April.

In the near term, US yields and risk sentiment are likely to remain the key drivers for the cross. Over the medium term, we still see USD/JPY trading mostly sideways within the 110114.50 range, targeting 113 in 3M,” Danske argues.

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