Mufg Forecasts Bullish Usdjpy

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Mufg Forecasts Bullish Usdjpy

MUFG Forecasts USD/JPY To Cross 150 Amid US Dollar Rebound

According to MUFG analysts, there is a high possibility for the USD/JPY pair to cross the 150.00 level if a rebound in the US Dollar happens. If we look around, the rise in the 10-year Japanese bond yields has already forced the BoJ to step in and take action.

This caused the JPY to weaken a little bit, but that has changed since the sell-off in the US Dollar. However, a rebound in the US Dollar would mean that the USD/JPY is ready to continue its bullish trend once again. This time, the target for the USD/JPY will be the 150.00 level.

Bond Buying Operation By BoJ

If we look at the BOJ's decision to buy the governmental bonds, it all started when the global bonds market experienced a sell-off. To counteract this, the BOJ stepped in to buy the governmental bonds in an attempt to stabilize the market.

However, that could have been avoided if the US Dollar's bullish trend had continued without any disruptions. In this case, the chances of the USD to cross the 150.00 level against the JPY will increase tremendously.

As per the analysts of MUFG, the sell-off in the US Dollar will not sustain and will fade very quickly. This will allow the pairs like the USD/JPY and EUR/USD to move in favor of the US Dollar.

For the most part, the bond-buying operation of BOJ was modest, which means even the central bank wasn't ready to go with full force. It also suggests that any more strength in the US Dollar will open the doors to the important resistance level of 150.00.

However, let's not forget that the BoJ is also paying close attention to the FX rate of JPY against other foreign currencies. So, any sustained weakness of the JPY against the USD & other currencies will also open the doors for BoJ FX intervention.

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