USD/JPY has continued its upward trajectory above 145. Economists at Danske Bank analyze the pair’s outlook.
USD/JPY seems fundamentally overvalued
We think the USD/JPY seems fundamentally overvalued and combined with potential monetary policy tightening; we expect the cross to drop to around 130 on a 6-12M horizon.
We think the BoJ still is underestimating inflationary pressures in Japan, and the persistence of underlying inflation will continue to build pressure on BoJ’s ultra-dovish stance.
See – USD/JPY: The risk of a retest of 150 is hard to ignore – Scotiabank
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