USD/JPY to have upward trajectory, to trade at 113 by end-2017 and at 118 by end-2018 – Lloyds Bank

Despite the recent political and economic events, the Japanese yen continues to trade in a narrow range against the U.S. dollar, noted Lloyds Bank in a research report. The election victory of PM Abe has seen volatility continue to drift lower. This leaves the yen vulnerable to an additional period of range trading.

The outcome of the election confirms the mandate for the government and Bank of Japan to extend their battle with the weak inflationary environment via expansionary fiscal and monetary policies. During its last meeting, the Bank of Japan kept its policy framework on hold, maintaining its yield curve control strategy.

In all, the USD/JPY pair is expected to stay unchanged from last month, stated Lloyds Bank. The U.S. Fed is expected to hike its rates during its December meeting, which might lead US Treasury yields higher and drive U.S. dollar strength. The pair is expected to have an upward trajectory through to the end of 2018.

“We forecast USD/JPY at 113 at end-2017 and 118 at end-2018”, added Lloyds Bank.

At 19:00 GMT the FxWirePro's Hourly Strength Index of Japanese Yen was highly bullish at 171.993, while the FxWirePro's Hourly Strength Index of US Dollar was neutral at -29.7953. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex

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