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- USD/JPY can push back to the recent high at 145 on no change in the BoJ's YCC policy – ING
USD/JPY can push back to the recent high at 145 on no change in the BoJ's YCC policy – ING
A lot of interest is building in Friday’s Bank of Japan meeting. Economists at ING analyze market implications for the JPY.
USD/JPY could break lower if the BoJ surprises the market with a YCC tweak
If the BoJ decides to leave the current policy settings unchanged, then USD/JPY looks as though it can push back to the recent high at 145.
While we cannot rule out a brief foray above 145 this summer, we doubt gains would be sustained - largely because US disinflation bells will ring increasingly louder during the summer and by September we would expect a broad Dollar bear trend to be underway.
If the BoJ surprises the market with a YCC tweak as we forecast, or gives a hint of possible policy adjustment in the near future, then USD/JPY could break lower – perhaps even lower than the recent low of 137 as the market would be taken by surprise. We have 3Q23 and 4Q24 USD/JPY forecasts at 135 and 130, respectively.
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