USD/JPY headed towards 110.80 levels - Westpac

Robert Rennie, Research Analyst at Westpac, suggests that the breakthrough of 107.80 for USD/JPY pair suggests that the move could continue targeting around 110.80 levels.

Key Quotes

“We shifted back to a neutral bias on USD/JPY a couple of weeks back on the basis that the US$ should have been garnering more support from rising US yields, that price action below 105 suggested a ‘blow-off” low and that above 107.80 there was some short term upside risk.”

“The break through 107.80 does suggest the move could continue with a ‘head and shoulders’ based objective that comes in close to 110.80.”

“The pace of increase in the BoJ’s balance sheet has lurched to fresh 5 year lows at ¥30tn and yet the BoJ still clings to a ‘more or less’ target of ¥80tn. Surely being ¥50tn less than this target warrants a change sometime soon?”