The following is USD/JPY range and outlook for next week as provided by Bank of Tokyo-Mitsubishi UFJ (BTMU).
- USD/JPY – NEUTRAL BIAS – (118.00-120.50).
The BOJ monetary policy meeting today and the release of the semi-annual report on the economic and inflation outlook passed without any major surprises. As expected the BOJ revised lower the inflation projections for this fiscal year and next (1.0% to 0.8% and 2.2% to 2.0% respectively) and the BOJ also pushed back the timeframe of reaching the 2.0% goal to H1 FY2016 from the end of FY2015.
With developments in Japan now unlikely to drive USD/JPY, the week ahead influences will be incoming economic data from the US to see if the much anticipated rebound in US economic growth is in sight. The ISM manufacturing report tomorrow and the ADP employment report are the key data. Of course the ADP will help shape expectations for NFP and judging from the initial claims data released earlier today (new cyclical low for claims), our sense is that the US labour market remains buoyant.