USD/JPY: Buy strategy on any dips below 110 - Westpac

Robert Rennie, Research Analyst at Westpac, explains that last week they argued that USD/JPY was getting expensive close to 115 and that the correct strategy was to shift back to a neutral stance and that bias proved spot on though the sharp correction was driven by Trump/ FBI/ Russia risk aversion.

Key Quotes

“It’s hard to see markets stepping back from this more risk averse stance any time soon given that investigations could take some time to land.”

“However, price action suggests that dips back to and through 110 are a buy opportunity.”

“Thus we remain neutral for another week given US$ weakness risks but would still flip to a buy strategy on any dips below 110.”