USD/JPY points to 125-130 in h1 2016 – BAML

FXStreet (Edinburgh) – Analysts at BAML see the pair edging to the 125-130 range during the first half of the next year.

Key Quotes

“In light of (1) the acceleration of the US economy and rise in short-term yields, (2) the possible downward revision of the BoJ’s bullish price outlook down the road, and (3) the BoJ’s asymmetrical stance on policy responses, we continue to see a gradually higher USD/JPY trajectory”.

“The range is likely to transition into USD/JPY125-130 into 1H16 as we forecast USD/JPY to rise to 125 by year-end and beyond in 1H16”.

“Our risk scenario is that inflation falls short of the BoJ’s outlook, prompting it to launch another round of monetary easing. In that case, USD/JPY above 130 would become likely sooner”.

Analysts at BAML see the pair edging to the 125-130 range during the first half of the next year…

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