The yen weakened further as USD/JPY pushed above 160.00 for a second consecutive session. The currency has been trading near multi-month lows against the dollar.
Analysts weigh a December rate hike
DBS Group Research expects Japan’s real GDP to expand 0.8 percent quarter on quarter, saar, in the third quarter, broadly in line with trend. Its economists said October trade data should show exports rising 17 percent year on year, while the trade deficit widens to 1.2 trillion yen. Together, they argued, these figures should reinforce the case for a 25 basis point Bank of Japan hike at the December meeting.
Commerzbank takes a different view of the currency’s path. Its economists no longer expect the Federal Reserve to halt rate hikes in December, and they have factored in a further increase in March. They also expect the BoJ to deliver two more hikes, in December and next spring. That convergence, Commerzbank said, is likely to have little impact on the yen, and it sees only a slight appreciation towards 155 by mid-next year.
Technical levels in focus
Societe Generale noted that USD/JPY has reclaimed its 200-day moving average, now at 158.70. Resistance sits at 160.40, the April high, and then at 160.70. A breakout above those levels could open the way to 162.20.
By our market data, USD/JPY stood at 159.722 yen as of 19:31 GMT on 14 November, near its 31-day high. CFTC data for the week of 3 November showed speculators net long the yen, with 102,321 contracts.
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Data: Swissquote · CFTC
