USD/JPY: Buy dips 111/113; take profit 115 - Westpac

Robert Rennie, Research Analyst at Westpac, explains that they have remained a buyer of dips on USD/JPY for over 4 months, but last week reverted back to buying 111/113 (we maintain our take profit at 115).

Key Quotes

“Price action sub 110.80 felt like a selling climax and the fact we have reverted back to 111.10 (38.2% of 99.02 to 118.66) adds some weight to that view.”

“Thus we stick with buy dips 111/113; take profit 115. There does seem to be a bit of BoJ history suggesting tweaks to monetary policy take place after FY or mid FY (QQME April 13; increase in asset purchase from ¥50 to ¥80 October 14). So we watch the April 26/27 ‘outlook’ meeting more closely for a (bullish USD/JPY) sign that the BoJ will finally abandon the confusing asset purchase target & focus on yield target.”