Forex Flash: USD/JPY looks bias for the week ahead – BTMU

FXstreet.com (Barcelona) - Bank of Tokyo Mitsubishi UFJ analysts note that after hitting a high of 82.62 on Monday, the USDJPY rate has reversed, loosing the Abe effect that had dogged the recent JPY sell off.

LDP Leader Abe commented on the inflation target of 2% with unlimited monetary accommodation by the BoJ but market reaction to this was marginal. They think that further Yen selling seems unrealistic given the present position. Investors look likely to hold the current USDJPY long position in place until elections on 16th December. They feel that investors will continue to buy USDJPY up to the recent lower limit of the 81 level.

Overall, they expect that USDJPY will move in a narrow range next week and USD buying will also be supported by continued improvement of the US economic indicators. However, Yen buyback in the USDJPY trade will start to counter further Yen selling flows.