USD/JPY continues to dodge 100.00 - Westpac

Research Team at Westpac, notes that the USD/JPY continues to dodge 100.00, which at least reduces the pressure on the BoJ near term, after the initial selloff.

Key Quotes

“But this resilience seems likely to be at least in part due to heavy long JPY positioning: at 27 Sep, CME leveraged funds were net long 60.7k contracts, the largest position since Mar 2008. With USD’s yield support likely to be capped and BoJ JGB purchases to become patchier, we still see sub-100 as a matter of time.

Technical: The break of the tight 100.00-101.50 range broke declining trend resistance. Given the positive turn in daily momentum on this break, USD/JPY looks set to retest 104.50 if not a secondary trend line (currently above 107). A slip below 101.50 would negate this turn in bias.”