USD/JPY targets 110 yen (video)
By Kira Iukhtenko, FBS analyst
USD/JPY hit a 5-year high of 105.70 on Friday, but the weak US non-farm payrolls pulled the pair back to the 105.00 support.
Despite the fact that dollar yen closed the week slightly below the January highs, we review the current pullback as temporary and recommend going long on dips. Our next targets lie at 106.40 (200-month MA)and 110.00/110.50. The short-term picture remains bullish as long as the pair holds above 104.80 (trend support). Next levels to watch below the price are 104.00 and 103.50.
The US Federal Reserve is getting more and more hawkish. In our view, one weak employment report is unlikely to change the whole positive trend in the US economy. The US dollar will likely resume growth very soon. Meanwhile, the Bank of Japan is still expected add monetary stimulus in the coming quarters. BOJ Governor Kuroda tried to sound as optimistic as possible on the September meeting, but he had to confirm the economy was hurt by higher taxes.