USD/JPY could drop below 100 on a weak NFP - MUFG

Analysts from The Bank of Tokyo-Mitsubishi UFJ, point out that the USD/JPY  pair is moving closer to the 100.00 but affirm that intervention remains unlikely. They expect the pair to trade in a range between 98.50 and 102.50.

Key Quotes:

“Ahead of Friday’s US non-farm payroll report, JPY buying pressure from Brexit has caused USD/JPY to slowly fall. A strong non-farm payroll report could feed market expectations for a Fed rate hike, which would likely slow US stock market momentum and limit USD/JPY topside. If the US employment data comes in weak, USD/JPY could drop below 100.”

“The Upper House election in Japan is expected to reinforce Prime Minister Abe’s political stability. BoJ Governor Kuroda may probably hold off on a policy move this month, but even so, market expectations for extra BoJ monetary easing may support the lower bound of USD/JPY. Moreover, cash repatriation moves by Japanese investors could also drive USD/JPY lower this month.”