USD/JPY: Scope for only a moderate move lower in the coming months – Rabobank

Is the Bank of Japan (BoJ) ready to act? Economists at Rabobank analyze Yen’s outlook ahead of the BoJ’s March meeting.

USD/JPY to edge lower into the BoJ’s March meeting 

While we favour an April rate hike over a move in March, we expect USD/JPY to edge lower into the March 19 meeting in anticipation of an early move. 

Even on a steady policy outcome this month, we expect downside pressure on the JPY to be limited as the market turns its attention towards the likelihood of a rate hike next month.

That said, given the resilience of the US economy and related US inflation risks, we see downside potential in USD/JPY to be limited to a move back to 140.00 on a 12-month view.