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TD Securities expects USD/JPY to drift toward 153 near term

The firm keeps a year-end USD/JPY forecast of 159.00, arguing the latest move reflects cyclical effects rather than a structural regime change for the yen.

Reported · Written up by our desk · Major Pairs

TD Securities strategists said the recent USD/JPY decline, driven by Japan Ministry of Finance intervention, looks cyclical rather than a shift in the yen’s broader policy regime.

They expect the next Bank of Japan rate hike to be more likely in December, and they doubt that sustained joint US and Japan intervention will provide lasting support without stronger US official flows.

In the meantime, the firm sees USD/JPY having room to drift toward 153.00 in the near term, while maintaining its year-end forecast at 159.00.

TD Securities also said it has reduced its tactically bullish JPY view after the latest price action and closed an AUD/JPY ratio put spread trade in its model portfolio.

Latest closeUSD/JPY 157.75 ▲0.1%

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