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Japan’s economy remains weak. What is the outlook for USD/JPY over the medium term?

Here is their view, courtesy of eFXdata:

NAB Research discusses USD/JPY outlook and maintains a slightly bearish bias over the medium-term.

“Japans’ economic recovery remains stuck in the slow laneDeflationary pressures add to our expectations for a lower USD/JPY. A post mortem on the Q3 Tankan survey released early in October has left us comfortable with our expectations of a slow economic recovery in Japan and lower USD/JPY over the coming year,” NAB notes.

“USD/JPY now trades around the ¥105 mark suggesting exporter profits look set to remain under pressure. On its own, the collapse in profits doesn’t bode well for USD/JPY. Our medium-term view on USD/JPY sees the pair slowly but surely heading towards a lower trading range of ¥100 to ¥105 in 2021,”NAB adds.

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