USD/JPY expected to edge higher medium term – Danske Bank

Following the recent pair’s price action, analysts at Danske Bank see spot inching higher in the medium term.

Key Quotes

“We are lowering our USD/JPY forecasts to 105 in 1M (108 previously), 107 in 3M (112), 108 in 6M (112) and 108 in 12M (112)”.

“Brexit and our call that the Fed will now be on hold for the rest of 2016 imply that there is less room for USD/JPY to move higher”.

“We continue to expect that BoJ will ease aggressively in July by cutting interest rates by 20bp and to announce additional quantitative easing. In addition, the risks of FX intervention are increasing. Hence, we expect USD/JPY to edge higher on 0-3M and stabilise medium-term”.