“Major but quarterly trends in global sentiment have shifted USD/JPY around. The Q4 18 risk-off took the cross from 113 to 108. Risk-on over Q1 took it back to 112 and the most recent sell-off has moved it back to nearly 109. We expect a volatile recovery to 112 over 12M but over 3M, the trend is likely risk off.”
“Global macro data is not coming in as good as hoped and positioning in JPY puts some risk in the cross to move to the January lows around 107.5.”
The JPY outlook is somewhat skewed on the downside. We forecast USD/JPY at 109.5 in 1M and probably even stronger in the coming quarter. The forecast reflects expectations of a globally slightly positive scenario over 12M but with headwinds as of today.”
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