Street Calls of the Week
Investing.com - UBS analysts predict that the Japanese yen’s future movement will depend on both upcoming U.S. employment data and potential Japanese election decisions, according to a research note released Wednesday.
The Swiss banking giant suggests that if Friday’s U.S. jobs report shows strong employment figures sufficient to push USD/JPY above 150.00, an announcement of Japanese elections could potentially drive the currency pair to test and breach the August 1 highs just below 151.00.
Conversely, UBS notes that weak U.S. employment data or a risk-off phase in U.S. equity markets amid further Treasury curve steepening would likely cause USD/JPY to decline, with Japanese political developments merely slowing the pace of the yen’s appreciation rather than reversing it.
The bank maintains its current USD/JPY target of 140.00 by the end of the third quarter, but emphasizes that reaching this level would require a "trifecta" of soft U.S. economic data, weaker risk assets, and more benign Japanese politics.
UBS’s analysis highlights the complex interplay of international economic data and domestic political factors currently influencing the yen’s valuation in currency markets.
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