USD/JPY Unlikely to Drop to 133.00, Say Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group

Introduction:

The exchange rate between the US dollar (USD) and the Japanese yen (JPY) is closely watched by investors and analysts as it reflects the strength of the US and Japanese economies. Recently, there has been speculation about the likelihood of the USD/JPY dropping to the 133.00 region. In this article, we’ll discuss the views of Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group regarding this matter.

Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group Weigh In

Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group have analyzed the factors that could affect the exchange rate between USD and JPY. Based on their analysis, they believe that the probability of USD/JPY slipping back to the 133.00 region is not favorable at the moment.

One of the reasons for this is the improving US economic outlook, which is expected to support the USD. The US Federal Reserve’s accommodative monetary policy, combined with the massive fiscal stimulus package, has provided support to the US economy, leading to a recovery in consumer and business confidence.

On the other hand, the Japanese economy is struggling to recover from the effects of the COVID-19 pandemic. The country has declared a state of emergency in several prefectures as it battles a surge in infections. This has led to a decline in consumer and business confidence, which has weakened the JPY.

Another factor that could influence the USD/JPY exchange rate is the divergence in monetary policies between the US Federal Reserve and the Bank of Japan (BOJ). While the US Federal Reserve has maintained an accommodative monetary policy, the BOJ has been struggling to achieve its inflation target, which has led to speculation that it may need to implement further monetary easing measures.

USD/JPY Outlook

Given the current economic and monetary policy conditions, Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group believe that the outlook for USD/JPY is positive. They expect the pair to continue to trade in a range between 108.00 and 112.00 in the near term, with the possibility of further upside if the US economic recovery continues to gain momentum.

However, the analysts caution that there are still risks that could affect the USD/JPY exchange rate, such as a sudden shift in market sentiment or an unexpected event that could impact the global economy.

Conclusion:

In conclusion, according to Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group, the probability of USD/JPY slipping back to the 133.00 region appears not favorable for the time being. The analysts cited improving US economic outlook, weaker Japanese economy, and diverging monetary policies between the US Federal Reserve and the BOJ as factors that could influence the exchange rate between the two currencies. The analysts expect the pair to continue to trade in a range between 108.00 and 112.00 in the near term. However, they also caution that there are still risks that could affect the exchange rate, and investors should closely monitor the economic and geopolitical developments.