Currency strategist from Credit Suisse pointed out, that USD/JPY reflected "Trump trade" the most. This supported the dollar and its bullish movement from $100 to almost $120 during the 6 weeks immediately after the victory of Trump in the presidential election before falling and giving almost 50% of all earned from January till now.
The positioning still looks long, and so these positions can be squeezed from the continuing short movement, but any negative news may have already been priced in the price.
The Bank does not expect the pair to reach down and test the bottoms of 2015, pending that would still have reforms to corporate taxation and the emergence of new inflationary dynamics of the administration's actions, and while it is a fact there will be more buyers after speculative long positions are harvested and earned from the market.
But for now, the Bank believes that USD/JPy will continue to decline slowly to $107 over the next three months.
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