USD/JPY expected to keep the 108-111 range – Danske Bank

Jens Sorensen, Chief Analyst at Danske Bank, expects the pair to extend the consolidative theme in the near term.

Key Quotes

“USD/JPY declined again overnight as the North Korean issue continues to dominate investor risk appetite”.

“As such, the market impact remains relatively muted indicating that investors do not seem to expect the crisis to escalate into war and previous escalations have been only short-lived”.

“We still see USD/JPY trading in the 108-111 range near term, with risks skewed to the downside in case of a further escalation of the crisis”.

“We are still long USD/JPY in Danske bank’s FX Trading Portfolio with a target of 114.50, but given the heightened near-term risks, which also include the US debt ceiling issue, we would consider closing the trade on moves in spot towards 111-111.50”.