The USD/JPY it has been trading in an upward direction up to 116.00. The ING economists believe that the pair could rise to 120.00.
The BoJ will be the last central bank to adopt a stronger currency
“Unlike many nations that embrace monetary strength to combat the brunt of inflation, Japanese policymakers have shown little resistance to JPY weakness.”
“Given its battle against deflation, Japan could arguably use some imported inflation and the BoJ’s recent shift to a balanced view on inflation risks still leaves it several years to adjust.”
“Fossil fuels account for about 85% of Japan’s energy consumption, all imported. Terms of trade losses and the US 2% return favor a hike to 120.”