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Mar 23 - 06:55 PM

USD/JPY: Supported N-Term Before Reversing Gains In H2 - Barclays

By eFXdata  —  Mar 23 - 03:00 PM

Barclays Research discusses USD/JPY outlook and target the pair at 120, 118, and 116 in Q2, Q3, and Q4 respectively.

"USDJPY is likely to remain well supported around its multi-year highs and potentially extend its uptrend in the near term, due to widening US-Japan yield differentials with monetary policy divergence, a negative terms-of-trade shock from higher commodity prices and continued capital outflows via portfolio and direct investment.

"However, the risk is tilted towards USDJPY becoming more symmetric and we expect it to face increasing headwinds and begin to reverse its gains in H2 22, with a potential shift in BoJ policy stance towards normalization and significant undervaluation of the JPY to its half-century lows amid an expected unwind of broad USD strength," Barclays adds. 

Source:
Barclays Research/Market Commentary

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