USDJPY to reverse back lower to 130 in 12 months – Danske Bank

Economists at Danske Bank expect USDJPY to inch higher in the next few months but expect the pair to turn back lower in the long-run.

Pressure on JPY will wear off

“The key driver of USDJPY remains the global inflation outlook and US treasury yields.”

“With the US labour market still in good shape, we are not convinced global inflation pressures are yet turning and thus, in the short run, JPY headwinds will remain in place. Looking further ahead, we do expect the pressure on JPY will wear off.”

“We forecast the cross at 143 (1M), 144 (3M), 139 (6M) and 130 (12M).”