USD/JPY: Upside risks remain place for the yen – MUFG

Analysts at MUFG Bank, expect the USD/JPY pair to trade with a neutral bias next week in the 105.00 - 107.50 range.

Key Quotes:

“USD/JPY is up slightly, but upside room is limited given JPY buying flows from repatriation of dividends and interest as well as US Treasury redemptions. The market liquidity surrounding the yen was not thick after the holiday week. This morning the MoF Japan data showed that Japanese have been active buyers of overseas bonds by JPY499.7 billion through the third week of August. The lower bound for USD/JPY will likely be firmly supported by Japanese yen selling flows.” 

“We think the direction of monetary policy is unlikely to be any clearer even after Jackson Hole. Many of the central bankers will likely discuss how to understand the present uncertainty under the political pressure and US-China trade conflicts. We expect USD/JPY to remain range bound.”