Explore eFXplus Derived Data That Drive Results
A Data Partner of:
Oct 20 - 12:55 PM

SocGen: Scope for Another USD/JPY Spike Above 150 Before Reversal; Tied to Yield Movements

By eFXdata  —  Oct 20 - 10:41 AM

Synopsis: SocGen outlines a scenario where the USD/JPY could momentarily surge beyond the 150 mark, primarily driven by climbing US yields. The analysis hinges on the interplay between US Treasury yields and the Bank of Japan's policy stance, suggesting a temporary spike before an eventual reversal. The peak's timing, however, aligns with the uncertainty surrounding the zenith of US 10-year yields, indicating an intricate forecast scenario.

Key Takeaways:

  1. Yield-Driven Momentum: The ascent in USD/JPY closely mirrors the rise in US yields, with a 'fair value' regression from early 2020 hitting 149.9. Continued upward pressure on US yields could propel the pair past the significant 150 threshold, albeit potentially briefly.

  2. Trigger Point - BOJ's Stance: The forecast anticipates that aside from yield movements, alterations in the Bank of Japan's inflation projections during the October 31 meeting could serve as a catalyst for the spike. However, the nature of this trigger suggests a reactive rather than a proactive market movement.

  3. Uncertain Peak Timing: Identifying when USD/JPY will hit its peak is a complex challenge, inherently tied to forecasting the peak of US 10-year yields. This uncertainty underscores the currency pair's sensitivity to macroeconomic variables and central bank policies.

  4. Potential 2024 Yen Comeback: Post the anticipated surge, SocGen projects a robust performance for the yen moving into 2024. This longer-term view considers eventual stabilizing or receding US yields and potential economic and policy shifts within Japan, fostering a more favorable environment for the yen.

  5. Magic of the 150 Mark: The 150 level for USD/JPY carries psychological weight in trading circles, often influencing market behavior. Penetrating this level, even temporarily, could trigger a range of speculative actions and protective measures among investors.

Conclusion: SocGen's perspective points towards a potential short-lived leap for USD/JPY beyond 150, primarily yield-induced, before an expected turnaround. The precise timing of this peak is as elusive as predicting the pinnacle for US yields, reminding traders of the inherent unpredictability within forex markets. Looking further ahead, the yen could emerge as a strong contender in 2024, implying a strategic long-view approach in market positioning.

SEB Research/Market Commentary


  • eFXplus
  • End-user license agreement (EULA)


  • About
  • Contact Us


  • Terms of Service
  • Privacy Policy
  • Disclaimer
© 2023 eFXdata · All Rights Reserved