USD/JPY: Upside limited even with Bremain - MUFG

Analysts from The Bank of Tokyo-Mitsubishi UFJ, continues to see a neutral tone in the USD/JPY  pair, and expect to move in the 100 - 106.50 range during the next week.

Key Quotes:

“Brexit has been driving the recent uncertainty in USD/JPY, with risk aversion supporting a JPY rally. Many Japanese investors and companies have been watching this risk event with great prudence. Risk aversion has been supporting bigger USD/JPY forward discounts for USD funding.”

“A vote for Brexit could cause USD/JPY to drop sharply. In that case, G7 central banks would likely work to quell volatility in the forex markets. If voters opt to Bremain, we think topside for USD/JPY will be heavy at around 107, as other EU countries could still exit and because of exporter USD/JPY selling close to the end of the quarter.”