USD/JPY could easily trade below 130 if banking sector conditions deteriorate again – ING

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The return of the conditions of the financial crisis has made the Japanese yen once again the clear beneficiary. The ING economists expect USD/JPY to drop below 130.

The yen will win from a macroeconomic point of view

“The yen has typically played the role of safe haven at times like the present due to Japan’s large current account and net foreign asset position (surplus years).”

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“The US banking crisis is going to tighten credit conditions in the US, hurt US growth and accelerate the Fed’s easing schedule. The same can be said for other major central banks and indeed , will drag global interest rates closer to Japan’s floor rates.”

“USD/JPY could easily trade below 130 should conditions in the banking sector deteriorate again, and recent events on both sides of the Atlantic only reinforce our confidence in our outlook for 120.00 for USD/JPY by the end of the year.”

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Source: Fx Street

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