Neutral view on Yen - JPMorgan

FXStreet (Bali) - JPMorgan Strategist continue to hold a neutral view in the Japanese Yen.

Key Quotes

USD/JPY continued to stick in the narrow range since the last publication of Key Currency Views on July 11. JPY was almost flat in trade-weighted terms over the period.

Our USD/JPY target stay at the same; 102 for Sep. and 106 for Dec. 2014. As long as geopolitical risks continue to make global investors risk-averse sporadically, it is difficult to expect JPY to weaken further.

Separately, Prime Minister Abe said he will reshuffle his cabinet in the first week of September

Although media recently reported that GPIF plans to boost Japan stock allocation to over 20%, we continue to believe that the expectation on GPIF by the market is a little too much.

Having said that, Japanese retail investors seem to have increased their interests in foreign stocks

Other than that, as opposed to what happened recently, once geopolitical risks ease and volatilities are calming down, the short-term model is likely to indicate that USD/JPY is too cheap.