Analysts at Danske Bank forecast USD/JPY could drop to 107.00 in the short term before turning to the upside, reaching 110.00 in a six month period.
Key Quotes:
“After moving lower in May and June, we bounced back a bit in July in tandem with commodities. We keep the forecast of USD/JPY at 107 in 3M. This reflects expectations that weakness in USD s likely to materialise, driving JPY up.”
“The key risk to our forecast is a scenario with rising commodities and stability or strengthening for the broad USD. We stick with our USD/JPY forecasts to 108.0 1M, 107.0 3M, 110.0 6M and 110.0 12M as we expect reflation to take hold later in the year. If the broad dollar moves down substantially or US Treasury yields fall much further, we think USD/JPY could undershoot the forecast, to(-wards) 105.”
Share
