Danske Research maintains a limited bullish bias on JPY, expecting USD/JPY to remain in 103-105 range over the coming weeks.
"We keep our expectations for further JPY strength. This strength is not due to a negative view on global risk sentiment but rather that we expect Asian outperformance to help JPY versus USD. Thus, the key risk to our profile becomes a shock that steepens the US yield curve and/or raises oil prices into the high USD50s per barrel for Brent and/or substantial USD strength," Danske notes.
"We attach a low probability to all of these. Jointly, this limits upside risk in EUR/JPY from here, as well, in our view," Danske adds.