Home›Forex›Major Pairs›Hawkish BoJ needed to support JPY vs Fed risk, Raboban…

Hawkish BoJ needed to support JPY vs Fed risk, Rabobank says

Rabobank expects USD/JPY around 159 over the next three months, but says Japan needs stronger fundamentals beyond Ministry of Finance intervention.

Reported · Written up by our desk · Major Pairs

FXStreet highlights Rabobank’s view on Japanese yen prospects, focusing on USD/JPY and arguing that Ministry of Finance intervention alone is unlikely to shift the currency pair without improving underlying conditions in Japan.

Rabobank Senior FX Strategist Jane Foley said further JPY strength would likely require more hawkish signals from the Bank of Japan, along with fiscal reassurances, alongside a less hawkish Federal Reserve environment.

The note points to a potential catalyst around the July 31 BoJ meeting, which it frames as coming just two days after the next Fed meeting, raising the risk that a hawkish Fed could keep the path for USD/JPY lower difficult.

Rabobank also cautioned that its three month USD/JPY 159 forecast looks optimistic because it would require multiple factors to align, and it called a hawkish BoJ next week an important first step.

Latest closeUSD/JPY 162.90 ▲0.3%

More like this

Sources