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Analysts at CIBC, see the USD/JPY pair moving lower over the next months and forecast it will drop to 106 during the third quarter and to 104 over Q1 2019.  

Key Quotes:  

“With G3 central banks remaining on hold and trade and Brexit tensions continuing to dissipate, risk has improved. This has caused the trade-weighted yen to decrease by around 5% from highs seen at the start of the year. Inert central banks have pushed volatility lower, which has weakened safe haven assets including the yen. With little risk events on the immediate horizon, sustained low volatility will put upwards pressure on cross yen pairs in the near-term.”

“Over the longer term, we look for JPY to remain one of the cheapest G10 currencies, especially considering the rally in global rates narrowing rate spreads. With the consumption tax scheduled for the fall, the BoJ will be on hold for the rest of the year. Regardless, the next move remains biased towards tightening come 2020. This is because, despite the domestic economy exhibiting some weakness at the start of the year, growth is expected to rebound, attributed to improving external demand and a recovering Chinese economy. This will effectively support the JPY in the longer term.”