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Forex pairs in this Article » EUR/USD, USD/JPY (London) - Bank of Tokyo Mitsubishi UFJ analysts are neutral USD/JPY and see spot ranging between 98.00 and 102.00 ahead.

They begin by noting that the upcoming economic indicators may sway the growing expectation for tapering QE next week. Additionally they add that the GDP figure for Q2 2013 in China next week is expected to decline from 7.7% YoY in 1Q2013. They feel that a sharper than expected slowing would weaken the dollar versus the yen if risk appetite turns more negative on global growth concerns. Additionally, the market expectation for the Upper house election is for an LDP victory but sharp gains to the upside will be limited ahead of this key event on 21st July.

They finish by commenting that ahead of the election, the upper ceiling of USD/JPY will be 102-level. They write, “We also believe there has been an over-reaction to the comments from Fed Chairman Bernanke and hence the scope for further downside for USD/JPY from here is limited. Next week’s semi-annual testimony by Chairman Bernanke should be USD/JPY supportive also.”
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