USD/JPY Stuck in Narrow Range as BOJ Signals Caution
The USD/JPY currency pair has surged to its 200-day moving average at 158.49 due to broad US Dollar strength, but analysts expect it to remain within a narrow range of 155.00-160.00 in the near term.
According to Brown Brothers Harriman's Elias Haddad, Japan's Q3 Tankan survey and the Bank of Japan's (BOJ) Summary of Opinions suggest that there is a high bar for faster tightening by the BOJ.
The Tankan all industries business conditions index improved to a 35-year high of 21 in Q3, but businesses expect it to ease to 15 in Q4. Inflation expectations were broadly steady.
The Summary of Opinions was hawkish on direction but generally cautious on the pace, with the Cabinet Office urging BOJ policymakers to examine carefully the cumulative effects of past policy interest rate hikes.