USD/JPY Rate Forecast: Tight March Range May Have Found Catalyst

USD/JPY Rate Forecast Talking Points:

  • USD/JPY Price Forecast: USD/JPY fails to break 26-day midpoint, remains in bearish stature
  • JP Finance Minister, Aso confirms Moritomo documents were altered to remove names of him and PM Abe
  • USD/JPY Rate Insight from IG UK: 3.15:1 long to short ratio by retail favors further declines

After trading in a rather tight sideways range of a few hundred pips, USD/JPY may have found a volatility catalyst in the Moritomo scandal that has recently resurfaced. Nikkei News Asia said it best, and most succinctly when they said, “The revived scandal threatens Prime Minister Abe’s grip on power.”

Either way, the USD/JPY downtrend remains entrenched below on closes below 107.095 (spot at 106.43), and institutions are looking for the broadening potential that USD/JPY could retest 100 if the scandal erupts.

Understanding Moritomo, and its potential Impact

Typically, scrubbing names from official documents of high ranking officials is a bad sign. Recently, Japan’s government released confirmation that scrubbing the names of Prime Minister Shinzo Abe and his wife, Akie along with Finance Minister Taro Aso had taken place around a land scandal that is said to benefit

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