Bank of America Global Research discusses the JPY outlook and maintains a bearish bias in the near-term.
"As US rates continue to rise and the BoJ's yield curve control (YCC) contains yen rates' upside pressure, USD/JPY's correction after the fiscal year-end proved to be more short-lived than we expected and JPY is again under pressure. USD/JPY's correction after the fiscal year-end proved to be more short-lived than we expected (report 29th March) and JPY is again under pressure. Japanese policymakers are facing the choice between rates stability and FX stability and the BoJ's and govt's reaction would be key for trading JPY and yen rates for the rest of 2022," BofA notes.
"We think the risk is tilted to a weaker JPY near-term unless the BoJ pivots in the April Monetary Policy meeting (27-28 Apr), which we think is unlikely, or US rates reverse course,"BofA adds.
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