USD/JPY at 102 as BOJ Easing Seen Unavoidable

The yen is set to snap this month’s advance against its Group of 10 peers, trading patterns suggest, amid speculation the Bank of Japan will have to expand monetary easing to ensure it meets an inflation target.

Technical indicators approached overbought levels as the yen tested 200-day moving averages against the euro and U.S. and Australian dollars. Citigroup Inc. said the Japanese currency’s failure to push beyond its moving average versus the greenback signals a decline, while Commonwealth Bank of Australia projected a drop against the Aussie.

“The yen is getting stretched,” Joseph Capurso, a Sydney-based currency strategist at CBA, said by phone yesterday. “Japan’s probably got the weakest fundamentals, at least when it comes to how it affects the yen. I think there’s more upside to dollar-yen and euro-yen, as well as Aussie-yen.”


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