Linked to rising BoJ rate hike expectations, USD/JPY has fallen from a January high in the 158.87 zone to below 156.00 this week, reports Jane Folet, FX analyst at Rabobank.
USD/JPY may return to 145 in a 12-month outlook
“Whether the currency pair can hold convincingly below the 155.00 zone in the near term will likely depend on two main factors. First, the signals provided on the pace of tariffs announced by Trump will remain a key influence on the USD. The longer the delay, the later the resulting price increase American consumers will face. This will provide the Fed more room to cut interest rates.”
“A second key factor for the USD/JPY outlook will be the relative hawkishness of BoJ Governor Ueda later this week. His tone will impact expectations on the timing of the BoJ’s next policy move. In Rabobank’s view, “USD/JPY may return to 145 in a 12-month outlook, although this assumes a cautious but progressive path for BoJ interest rate hikes.”
Source: Fx Street
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