USD/JPY: catching a bid on the fix through pre-Brexit levels

USD/JPY continues with the bid as the Tokyo fix sees the Yen off across the board. USD/JPY spiked 25 pips making fresh highs for the last few business days of trade at 106.66.

The main events for the week come with the BoJ and FOMC. While the Fed are not expected to hike rates, the BoJ is widely expected to either cut interest rate and/or extend its QE programme.

"Speculation of "helicopter money" in Japan undermined the yen, until many participants accepted that BOJ Governor Kuroda's June comments noting the BOJ purchases of bonds directly from the government is banned," explained analysts at Brown Brothers Harriman. 

USD/JPY levels

The analysts at BBH suggested that the technical factors remain constructive and another attempt on the JPY107.50 area looks likely, though a break of JPY105.40 would negate the favorable tone. 

Analysts at Commerzbank explained that on a follow through, "The 108.78/78.6% retracement, which is the last defence for 111.45 May high. The market stays immediately bid above the 103.55 support (16th June low)".