Credit Suisse discusses USD/JPY outlook in Q4.
"BOJ Yield Curve Control remains successful in pinning Japan 10y bond yields very close to 0.0% under most circumstances. This continues to provide the USD with a large rate differential vs JPY as a baseline, and to generate a higher USDJPY whenever US yields rise. A large risk-off event could be impactful in terms of hitting positioning complacency and generating higher levels of JPY volatility and encouraging greater FX hedging," CS notes.
"We roll on our Q3 view for another quarter, seeing value in buying USDJPY on dips to 108.00 and looking to sell on rallies towards 114.00 given the poor risk / return asymmetry at those high levels," CS adds.