Will USD/JPY hit 150 or 160 first? Place your bets
July 30 (Reuters) - Is USD/JPY more likely to trade at 150 before 160, or vice versa? That is one of the questions foreign exchange traders are grappling with ahead of Bank of Japan and Federal Reserve event risks this week.
USD/JPY was last at 150 in March and last at 160 on July 11 - a day on which data suggested Japan spent $22.4 billion on the yen (subsequent data suggested Japan spent another $13.5 billion, buying yen, on July 12).
There is scope for USD/JPY to rise if the BoJ keeps interest rates unchanged on Wednesday, or delivers a dovish hike (decision expected 0300-0430 GMT). If the Fed is more dovish than forecast a few hours later, USD/JPY could fall.
CFTC data on FX positioning showed the net yen short shrank 41% to 107,108 contracts, its lowest since March, in the fortnight ended July 23 - before further unwinding of yen-funded carry trades helped depress USD/JPY to a 12-week low just under 152 (on July 25).
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(Robert Howard is a Reuters market analyst. The views expressed are his own)
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