USD/JPY: More upside room until summer 2019 and here is why – Nomura

Analysts at Nomura now see more upside room for USD/JPY until summer 2019.

Key Quotes:

“There are four factors behind our more bullish USD/JPY view:

• Diminishing market expectations for BOJ normalization,  
• Resilient US data, while US yields are becoming more sensitive to data surprises,  
• Reduced political uncertainty in Japan, and  
• A more USD/JPY positive supply-demand situation, as the trade balance has deteriorated while Japanese residents’ foreign investment has remained strong. We expect USD/JPY to overshoot to above 120 until next summer, before retracing from Q4 2019 onwards.”