USD/JPY finally breaking ranges - Scotiabank

By FXstreet.com | June 27, 2014 AAA

FXStreet (Guatemala) - Camilla Sutton, CFA, CMT, Chief FX Strategist at Scotiabank explained USD/JPY has broken out of its range to the downside, falling easily through support at the 200‐day MA after Japanese inflation was in line with expectations, removing the weight of uncertainty.



Key Quotes:



" May CPI rose 3.7%y/y on headline, 3.4%y/y ex fresh food and 2.2%y/y ex food and energy; accordingly inflation met expectations and rose from April's release."



"The jobless rate fell to 3.5%, but this was offset by a much larger drop than expected in household spending. The data from Japan is complicated by the implementation of the consumption tax; however the uptick in inflation is encouraging for the BoJ and decreases the near‐term need for policy to turn more aggressive."



"USD/JPY has broken out of its near‐term range; but remains within its multi‐month 100.76 to 104.13 range (see chart). We do not foresee the currency breaking this range in the near‐term and hold a Q314 target of 104 and a year‐end target of 109."



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