USD/JPY direction to be tested by data and announcements - BTMU

Analysts from The Bank of Tokyo-Mitsubishi UFJ, see the USD/JPY pair trading with a neutral tone next week, between 99.50 and 102.50.

Key Quotes:

“Data releases and announcements will test the direction of USD/JPY tomorrow and next week. The BoJ releases its JGB purchase plans for October, which will show how Governor Kuroda intends to control the yield curve. Changes in JGB purchases may be slow, as the BoJ’s September policy statement did not detail concrete plans, less directive. Foreign asset selling in early October could reveal Japanese investor sentiment about taking on risk in 2H.”

“Monday’s releases of the September Tankan and US ISM data may test views about underlying growth momentum in Japan and the US. BoJ monetary policy operations will reflect the reality of controlling the yen yield curve under QQE. This could test USD/JPY direction ahead of the US non-farm payroll report next week, and USD/JPY could decline gradually in line with our scenario.”