USD/JPY long term targets and wages
|From Japan’s financial press overnight, Economists see the Wage negotiations resulting in an average increase of around 3.9% in annual pay for union workers at major firms. That would be the biggest rise in 31 years. Not much difference from the 3.6% last year. I don’t see how this lends credence to an interest rate change.
From the Japanese Government: Government draft budget for fiscal 2024, currently under deliberation in parliament, features general-account spending of ¥112.57 trillion ($746 billion) — the second-highest figure on record.
The BOJ is running a massive surplus. A possible raise means the money supply surplus begins to drop. To not touch rates means money supplies remains the same. A drop to rates means a higher surplus.
In terms of money supplies and interest rate levels: the BoJ is in good shape.
Long term, USD/JPY sits on averages at 137.20, 127.96 and 122.80. Targets 146.70, 139.43 and 134.82. Higher must break 148.52. Range 146.70 to 148.52.
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