Economic Experts at Danske Bank view narrowing rate differentials in between Japan and G10 to favour the JPY over the coming year.
Yield differentials to be a tailwind for the JPY over the coming year
We anticipate USD/JPY to gradually decrease listed below 135 on a 12M horizon. This is mainly due to the fact that our company believe that long United States yields have actually reached their peak, although we do not anticipate a great deal of disadvantage from here.
We anticipate yield differentials to be a tailwind for the JPY over the coming year, as G10 reserve banks, other than the BoJ, are most likely to begin rate cutting cycles. In addition, historic information recommends that a worldwide environment defined by decreasing development and inflation tends to favour the JPY.
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