JPY: Moving lower on fading risk-off sentiment - ING

A mixed bag for US data next week might not spell massive USD upside, but when combined with a more stable global risk backdrop, analysts at ING still expect the upside bias in USD/JPY to persist.

Key Quotes

“Political risks in the US are likely to prevail, especially as we approach the debt ceiling limit later next month. But without an escalation of US or geo-political risks, it's hard to see safe-haven JPY demand continuing.”

“While the uptick in August Tokyo CPI was encouraging for next month's national release, we note that inflation around 0.5% still remains well below the Bank of Japan's over-optimistic, and not very credible, 2% inflation target. Still, our economists believe that Abe and Kuroda's dogged efforts to achieve this are unlikely to be slackened anytime soon, making BoJ policy normalisation a far-distant reality.”