The USD/JPY it is now almost 10% below its high near 152 at the end of October. As reported ING analyststhe pair could drop to 125-130 next year.
The yen is poised to outperform in 2023
“If the US dollar moves lower in 2023, USD/JPY would be the best vehicle to express the opinion. This is based on the view that the positive correlation between bonds and stocks can be broken – bonds recover , equities remain soft – and that the 10-year US Treasury yield ends 2023 around 2.75%. USD/JPY could trade at 125-130 under that scenario.”
“We now suspect that any recovery in the dollar between now and the end of the year stalls at 142/145.”
“In addition, USD/JPY will face an ultra-dovish Bank of Japan governor change next April – a major event risk for local and global asset markets.”
Source: Fx Street
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