30 Aug 2013
Flash: USD/JPY trend downgraded to neutral – Westpac
FXstreet.com (New York) - Sean Callow, a Global FX Strategist at Westpac analyzes the short and long-term outlook of the USD/JPY as it pertains to macro related events.
Key quotes
“Critical for the USD/JPY will be any sense of which way the Tax
Panel has pushed the debate. Logic suggests the Panel will recommend in favor of the contentious sales tax increase to 8% next April and 10% in October 2015.”
However, Amari’s response will be important. CAPEX is the other moving part here. A soft CAPEX outcome would add to our view that we can afford to wait for dips to buy. Failure to agree to the tax hike should add to upside risk for the ¥ in our view. We remain neutral for USD/JPY on the week ahead, but shift our 1-month trend to neutral/ up and 3-month trend to up.
Key quotes
“Critical for the USD/JPY will be any sense of which way the Tax
Panel has pushed the debate. Logic suggests the Panel will recommend in favor of the contentious sales tax increase to 8% next April and 10% in October 2015.”
However, Amari’s response will be important. CAPEX is the other moving part here. A soft CAPEX outcome would add to our view that we can afford to wait for dips to buy. Failure to agree to the tax hike should add to upside risk for the ¥ in our view. We remain neutral for USD/JPY on the week ahead, but shift our 1-month trend to neutral/ up and 3-month trend to up.