UBS CIO Wealth Management cuts their USD/JPY forecasts, from a research note on Friday
According to the note, the reason for doing so is mainly on the weaker US dollar and also that the relationship between USD/JPY and US-Japan yield differentials is likely to weaken.
"The pair's divergence from 10-year yield spreads can be sustained as long as the market believes there will be eventual BOJ tightening", they argue.
They also add that futures data reveal that the yen is the most highly shorted currency, which makes it prone to a rebound if the positions were to be unwound.
The note shows that they cut their forecast of USD/JPY from 112, 115, and 115 for 3, 6, and 12 months to 110 for all three time horizons.