USD/JPY seen at 125 by end-2023 as the uptrend has come to an end – ABN Amro
Bank of Japan (BoJ) surprised the market by raising the upper band on its yield curve control (YCC) policy. The move triggered the Yen to rally by more than 3% versus the USD and the Euro. Economists at ABN Amro expect a further comeback of the JPY.
BoJ tweaks YCC
“The BoJ surprised friend and foe by shifting its YCC framework much earlier than expected. While leaving its policy balance rate and 10-yr yield target unchanged for now (at -0.1% and 0.0%, respectively), the BoJ announced to widen the trading band on 10-year bond yields and raise the upper limit of the band to around 0.50%, from 0.25%.”
“The uptrend of the US Dollar versus the Yen has now also come to an end, with the breaking of the 200-Day Moving Average in USD/JPY.”
“We expect more upside in the Yen versus the USD, mainly because of the rate cuts by the Fed we foresee to start end of 2023.”
“Our end-of-year forecasts for USD/JPY currently stand at 132 for 2023 and 125 for 2024.”
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FXStreet Insights Team
FXStreet
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