USD/JPY seen at 115.00 in 6-month – Danske Bank

Morten Helt, Senior Analyst at Danske Bank, sees spot gaining upside traction to the 115.00 region within the next 6 months.

Key Quotes

“The upcoming general election in Japan on 22 October should not have a significant impact on USD/JPY if Shinzo Abe maintains his majority in the Diet following the election, as this is widely expected and priced in the FX market. However, we still see USD/JPY moving higher in coming months supported by strong global PMIs and a potential Fed rate hike in December. We target the cross at 113 in 1M (previously 111) and 114 in 3M”.

“Fundamentally, we still see a case for a higher USD/JPY over the medium-term horizon, driven by Fed-BoJ divergence, higher global yields (eventually) supported by global growth recovery and portfolio outflow out of Japan. We target USD/JPY at 115 in 6M and 116 in 12M”.