USD/JPY to gradually decline in 2016 – MUFG

By FXStreet FXStreet (Delhi) – Takahiro sekido, Japan Strategist at MUFG, notes that the Japanese yen has been one of the strongest currencies in 2015, together with the US dollar.

Key Quotes

“Looking ahead, the Fed’s gradual policy moves may not encourage USD/JPY buying. Japan’s current account surplus has recovered to better than the recent average. The huge current account surplus and the BoJ’s caution in waiting-and-seeing about risk contagion from external uncertainties will likely mitigate market expectations for a further rise in USD/JPY. This is in line with our scenario.”

“In 2015 we confirmed structural changes in flows surrounding JPY. We will see the next phase in currency movements in 2016, including surrounding JPY. In this context, we expect that USD/JPY will likely drop to 118 over the next twelve months.”
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Source:: FX Street