USD/JPY seen sidelined in the medium term – Danske Bank

Pablo Piovano FXStreet

Senior Analyst at Danske Bank Morten Helt believes the pair could trade within the 108-115 range in the medium to longer run.

Key Quotes

“The sell-off in the US and European fixed income markets is currently weighing on USD/JPY, and we expect the combination of portfolio flows, choppy market conditions and stretched short speculative JPY positioning to push USD/JPY lower going into fiscal yearend in Japan (on 31 March). We have thus revised our 1M and 3M forecasts lower to 104 in 1-3M (previously 112 in 1M and 113 in 3M)”.

“Over the medium term, we expect USD/JPY to gradually recover supported by continued solid global growth outlook and Fed-BoJ divergence. As such, we still see USD/JPY trading mostly sideways within the 108-115 range in 6-12M. We target the cross at 108 in 6M (previously 114) and 110 in 12M (previously 114)”.

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

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