According to Citi’s FX analysts, the Bank of Japan’s upcoming meeting on July 31st could have a significant impact on the USDJPY pair, potentially pushing it back to the low 150s. The possibility of a rate hike and a cut in monthly bond purchases has raised concerns among investors, leading to a potential downward movement in the exchange rate.
Despite these concerns, the analysts also highlight the potential for a short-term bounce in USDJPY, driven by stronger USD GDP and Core PCE figures. In the event that the BoJ decides not to hike rates in July, we could see a temporary uptick in the exchange rate.
However, the analysts caution that, in the event of a rally, reaching the 55-day moving average (157.75) could present attractive selling opportunities for investors looking to capitalize on potential market fluctuations.
Analysis:
The Bank of Japan’s upcoming meeting has the potential to significantly impact the USDJPY exchange rate, with analysts predicting a possible rally to 157.75. Investors should closely monitor the outcome of the meeting and be prepared to take advantage of potential market movements.