USD/JPY: Bearish N-Term; Beware Of A Risk Of Another Flash Crash Into Chinese New Year

MUFG Research discusses USD/JPY outlook, and adopts a tactical bearish bias, expecting the pair to move downward in a 111-107 range in the near-term.
"The Chinese Lunar New Year begins next week, and market liquidity during Asian time zones will likely diminish. With trading flows down, there may be a risk that an unexpected event could trigger a sudden market fluctuation, like what happened with the ‘flash crash’ down to the JPY104 level over the Japanese extended New Year holidays," MUFG notes. 
But the level would probably reaffirm the lower range after the January FOMC meeting. JPY buying is likely to prevail, due to seasonal dividend and interest repatriations. The downward pressure for USDJPY will likely strengthen," MUFG adds.