USD/JPY seen at 115.00 in the medium term – Danske Bank

Senior Analyst at Danske Bank Morten Helt expects the pair to visit the 115.00 area in the next 6-months.

Key Quotes

“We still see USD/JPY moving higher in coming months supported by strong global PMIs and a potential Fed rate hike in December. Overall, we still see the cross within the 111.65-114.50 range near term, targeting 114 in 1M (previously 113) and 114 in 3M. Key risks on the downside remain related to risk appetite and a re-escalation of the US-North Korea tension, while progress on US tax reform could potentially send the cross higher”.

“Fundamentally, we still see a case for a higher USD/JPY over the medium-term horizon, driven by Fed-BoJ divergence, higher global yields (eventually) supported by a global growth recovery and portfolio outflow out of Japan. We target USD/JPY at 115 in 6M and 116 in 12M”.