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MUFG Research discusses USD/JPY outlook and targets the pair at 133,130, and 127 by end of Q2, Q3, and Q4 respectively.
- "The underperformance of the yen in February is unlikely to become sustained and we maintain that the inflation angst that has emerged globally will not return to anything like during period of last year when JPY depreciated sharply. Since the dollar peaked at the end of September, JPY has been 2nd best performing G10 currency to end-January. Some retracement in that context is understandable," MUFG notes.
- "But we maintain inflation will subside from here and yields globally are close to peaking which point to JPY recovery, especially with BoJ policy set to change as well," MUFG adds.
