The risk-reward remains skewed to the downside – MUFG

In September, the Yen weakened further versus the US Dollar. Economists at MUFG Bank analyze USD/JPY outlook.

Yen weakness to turn

The risk-reward in USD/JPY remains skewed to the downside at this juncture although a break higher initially now seems more likely, which will then likely prompt the intervention being hinted at. Hence, the prospect of remaining above those levels for long time is low. 

A shift in BoJ policy also becomes more likely and we would expect strong resistance to Yen weakness at levels over 150.00.