Scotiabank Sees Policy Risks Supporting JPY Gains Against US Dollar
Japanese Yen (JPY) gains against the US Dollar (USD) are supported by policy risks, according to Scotiabank strategists. The USD/JPY pair is trading near 159, with modest JPY gains offering reassurance to the Ministry of Finance after recent weakness.
The BoJ is considering a possible hike in the fall, and Q2 GDP data will be released early next week, making policy commentary key for the currency pair. The strategists flag resistance above 159.50 and support just above 158.50 for USD/JPY.
The MoF reassurance is likely providing considerable comfort to officials at the Ministry of Finance, given ongoing concerns about the JPY's downward trajectory. Coordinated action from both the BoJ and the Fed has been material in pushing back against JPY weakness.