JPY Price Analysis & News
Despite the brief attempts to recover, USD/JPY upside remains capped. On the technical front, the trendline from the YTD low has put a halt to any rallies (110.50-60). Alongside this, since the FOMC meeting, USD/JPY has continued to drift lower amid the pullback in the US Dollar. What’s more, US/JP bond spreads have moved increasingly in favour of the Japanese Yen, while sentiment across the equity space remains fragile. Therefore, given these factors I lean towards fading rallies in the pair.
USD/JPY vs US/JP 10Y Bond Spread
![](https://a.c-dn.net/b/0HOPgx/Japanese-Yen-Outlook-USDJPY-Month-End-Bounce-to-be-Capped_body_Picture_1.png)
Source: Refinitiv
With calendar somewhat quiet to close out the month, FX will likely centre around month-end flows. That being said, I wouldn’t take too much from the moves, should price action become erratic. It is more a point of being aware that volatility may pick up heading into the 4pm London Fix. However, month-end flows have typically been JPY negative, particularly on the crosses. In turn, any pick up in USD/JPY could be used to accumulated shorts in the pair.
GBP/JPY Performance on Month-End
![](https://a.c-dn.net/b/0cnraH/Japanese-Yen-Outlook-USDJPY-Month-End-Bounce-to-be-Capped_body_Picture_5.png)
Source: Refinitiv, DailyFX
USD/JPY Chart: Daily Time Frame
![](https://a.c-dn.net/b/4aledU/Japanese-Yen-Outlook-USDJPY-Month-End-Bounce-to-be-Capped_body_Picture_2.png)
Source: Refinitiv