USD/JPY set to test the 120 level into year-end – CIBC

Policy normalization and higher JGB yields leave bias for USD/JPY to test towards 120 into year-end, economists at CIBC Capital Markets report.

BoJ policy normalization to boost JPY valuations ahead

“While Kuroda was intimately associated with Abenomics we would not expect Ueda to be so tainted. Consequently, we would anticipate policy normalization should macro conditions warrant it.”

“Q2 2023: 125 | Q3 2023: 1.23 (USD/JPY)”

“Policy normalization and higher JGB yields, easing spreads versus UST, leave bias towards USD/JPY testing towards 120 into year-end.”