USD/JPY seen at 112.00 in a year’s view – Danske Bank

According to Senior Analyst at Danske Bank Morten Helt, the pair is expected to climb to the 112.00 area in a 12-month horizon.

Key Quotes

“The downward pressure on USD/JPY stemming from the selloff in the US and European fixed income markets has eased. However, we still see risks skewed to the downside in the coming months as we expect the combination of portfolio flows, stretched short speculative JPY positioning and not least concerns about the Trump administration’s protectionist agenda to weigh on USD/JPY”.

“We target 105 in 1M (previously 104) and 107 in 3M (previously 104), but stress that we see risks skewed to the downside relative to our forecast”.

“Over the medium term, we expect USD/JPY to gradually recover supported by continued solid global growth outlook and Fed-BoJ divergence, and we expect the cross to eventually return to the 110-115 range in 6-12M. We target the cross at 110 in 6M and 112 in 12M”.