Morten Helt, senior analyst at Danske Bank, believes that the pair USD/JPY could climb up to the area of 114.00 in the short term.
«Although the combination of PMI’s global strengths and the postponement of risk on the debt limit the U.S. is good for risk appetite and has improved the bullish bias for the USD/JPY in the short term, geopolitical uncertainty related to North Korea continues to represent a weight in the couple».
«According to the latest data on IMM positioning non-commercial JPY is now back in territory short, suggesting that the risks are tilted to the downside for the USD/JPY from the point of view of positioning».
«I still expect the USD/JPY to operate within the rengo 108-111 short-term, addressing 111 in 1M and 114 in 3M. Fundamentally, we continue to see a case bullish for the USD/JPY in the mid-term horizon, driven by the divergence between the Federal Reserve and the Bank of Japan, the highest yields in the world (eventually), supported by the recovery of global growth and output of funds from Japan. We target USD/JPY at 116 in 6-12M».