USD/JPY: Limited upside potential for the Yen in the near term – Commerzbank

FXStreet Insights Team FXStreet

Inflation rises in Japan. Economists at Commerzbank discuss BoJ's policy outlook and its implications for the Yen.

Prices in Japan are rising

“Prices in Japan are rising. As a result, some analysts expect another increase in the 10-year Japanese government bond yield target as early as this summer, effectively pushing up long-term interest rates in Japan. However, USD/JPY levels around 140 suggest that this is (still) a minority view.”

“As long as the BoJ continues to signal a wait-and-see approach to gain more certainty about the sustainability of inflation dynamics, high inflation will erode the Yen's purchasing power. As a result, we see limited upside potential for the Yen in the near term.”

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