Investors Bought The Dip In March & April; What's Next? - BofA

05/19/2020

Bank of America Global Research maintains a structural bearish bias on USD/JPY over the coming months.

"Lockdown in key foreign economies led to deterioration of Japan's current account balance in March and likely in April while investors may have bought USD/JPY's dip. These factors probably mitigated downward pressure on USD/JPY in March," BofA notes.

"Going forward, (1) a low oil price, (2) bottoming out of exports, (3) slowdown in outward M&A, and (4) the unattractive level of unhedged foreign bonds, should be supportive of JPY," BofA adds.