MUFG Research discusses USD/JPY outlook and maintains a neutral bias, expecting the pair to trade in a 110.50-113 range in the near-term.
"USDJPY has risen slightly. Japanese investors were net sellers of securities by JPY1.6 trillion the first week of April, primarily to take gains on foreign bonds. The second week of April, they turned slight net buyers, by JPY95.8 billion. They are expected to rebuild their portfolios by the third week of April and are expected to be quiet the last week of the month ahead of the 10-day Golden Week holidays," MUFG notes.
"With yen short positions at the CFTC growing, there have been yen buying flows, and the trading range for USDJPY has been narrowing. Over the near term, there are no big indicators coming up, and with the BoJ not expected to make any policy changes next week, USDJPY will probably remain in a narrow trading range. The market does not seem to have factored in speculation of BoJ monetary easing, but JPY could rally a little after the April meeting ends," MUFG adds.