USD/JPY: We continue to see the potential for further upside – Rabobank
18.05.2022, 16:50

USD/JPY: We continue to see the potential for further upside – Rabobank

Analysts at Rabobank continue to favour the US dollar over the Japanese yen as a safe haven in this current crisis and they see scope for a move in USD/JPY towards 132.00 on a one to three-month view, assuming the Federal Reserv hikes interest rates at an aggressive pace in the coming months and that the Bank of Japan retains an extremely dovish policy position. 

Key Quotes: 

“Despite the pressure on the trade balance, Japan’s current account recorded a second straight surplus in March, proving that investment income into the country can still outweigh the impact of surging energy and commodity costs. The better than expected current account release helped restore confidence in the JPY’s safe haven status and coincided with a dip lower in the value of USD/JPY towards the end of last week. We continue to favour the USD over the JPY as a safe haven in this current crisis and see scope for a move towards USD/JPY132.00 on a 1 to 3 month view.  This view assumes that the Fed hikes interest rates at an aggressive pace in the coming months and that the BoJ retains an extremely dovish policy position.”

“While better Japanese current account data and a bout of short-covering has pushed USD/JPY away from its recent highs, we continue to see the potential for further upside over the summer as the Fed continues to hike rates.  Assuming an improvement in Japanese economic data, speculation of a potential alteration to the BoJ’s YCC policy has the potential to rein back USD/JPY into the autumn.”
 

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