ING analysts expect USD/JPY to test 159 resistance on dollar strength, though potential Bank of Japan policy shifts and yen-buying interest above 160 could cap further gains.
ING expects the broadly strong dollar could push USD/JPY through resistance at 159, a clear short-term upward driver. However, the bank also flags that above 160 investors will look to buy cheap yen, capping the upside. The strong-dollar bias dominates near term, but the 160 level acts as a stated reversal zone.
Improving Japanese manufacturing sentiment, supported by semiconductor and data centre demand, strong corporate profits and firm wages, could reinforce the Bank of Japan's view that inflation is stable at 2.00% and its accommodative policy can be reined in — a supportive backdrop for the yen. Near term, dollar momentum keeps the yen under pressure below 160 in USD/JPY.
ING reports that broad dollar momentum is pushing USD/JPY toward the 159 resistance level. While the pair faces upward pressure, analysts note that investors are likely to buy the yen if the rate climbs above 160. Meanwhile, improving Japanese manufacturing sentiment and firm wage data may bolster the Bank of Japan's confidence in stabilizing inflation at 2.00%.
The article says the pair could easily push through resistance at 159 given the broadly strong dollar, but that above 160 investors are increasingly likely to buy the yen as it looks cheap.
Strong Japanese data — improving manufacturing sentiment, solid corporate profits and firm wages — could give the Bank of Japan confidence that inflation is stable at 2.00% and lead it to rein in accommodative policy, supporting the yen.
Improving Japanese data — manufacturing sentiment, semiconductor and data centre demand, strong profits and firm wages — could reinforce the Bank of Japan's confidence that inflation is stable at 2.00%, allowing it to rein in accommodative monetary policy.
Yes, near term: ING says the broadly strong dollar means USD/JPY could easily push through resistance at 159, though investors would look to buy the cheap yen above 160.