Westpac Wary Of Potential For Further AUD/JPY Upside From Here

Westpac note that “AUD/JPY has recouped almost all the declines triggered by MoF/BoJ intervention in late April and early May.”

• Although they “suspect further AUD/JPY gains beyond 105.00 are unlikely at this point.”
• They reason that “markets are likely to be wary about testing Tokyo’s intervention resolve as JPY weakness approaches the April/May intervention zone. There is a non-negligible chance of another BoJ policy adjustment at their next meeting 14 June too.”
• They also highlight “JPY’s chronic lack of yield and the low global-vol environment remain ongoing medium term JPY headwinds, likely keeping AUD/JPY above 100 in Q324.”