Credit Agricole CIB Research likes long USD/JPY exposure over the coming weeks.
"USD/JPY continues to look cheap relative to the recent steepening in the UST curve relative to the JGB curve. We expect the US-Japan box spread to exert itself on USD/JPY in the coming weeks and remain long USD/JPY via a one-touch option with a target of 108," CACIB notes.
"With President Trump recovering from Covid-19 and the next presidential debate re-scheduled for 22 October, uncertainty around the timing of the US election has been resolved and is positive for USD/JPY. We also now expect there to be no early election in Japan, which is another positive for the exchange rate," CACIB adds.