3 reasons why USD/JPY is heading back down to 105

A note via ING forecasting lower for USD/JPY, to 105 in three months

(1) Japan's GPIF probably will not pour money into overseas bonds when $/JPY is above 110

(2) the rally to 112 was largely down to USD funding strains, which should reverse into April

(3) Japan's large current account surplus will see JPY favoured in a recession.

Its a detailed note, but this snippet on point2:

• Amongst many fire-fighting measures, the Fed and the US Treasury have since re-introduced schemes to support the CP market directly (CPFF & MMLF) and measures to support investment grade corporate issuance (PMCCF and SMCCF)
• Along with the promise for unlimited QE, the Fed has managed to introduce some calm into money markets
• We expect even calmer conditions once the Japanese financial year-end has passed (March 31st) and the Fed starts its CPFF program in April. A turn-around in the basis swap should take some upside pressure off USD/JPY.