USD/JPY to turn higher again as BoJ maintains its dovish policy stance – Nordea
|The Japanese yen moved above 145 against the US dollar. This forced the Japanese government to step in to intervene. USD/JPY turned back lower but economists at Nordea expect the pair to move back higher as the Bank of Japan (BoJ) maintains its stimulative monetary policy.
Short-term relief for the JPY
“The intervention has provided short-term relief to the JPY and so does the announcement that Japan will reopen to foreign tourists, but with the discrepancy between rates in Japan and the rest of the G10 countries only rising in the months to come, we believe that the USD/JPY will turn higher ahead.”
“What will stop the weakening of the JPY is a shift in monetary policy from the BoJ or a 180-degree shift from all other G10 central banks. The shift from the BoJ could easily come when the current BoJ Governor Kuroda retires in April 2023. We thus expect the JPY, which is the worst G10 performer against the USD this year, to recover most of its losses next year.”
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