Danske Research discusses the JPY outlook in light of its latest forecasts updates.

"We continue to be quite positive on continued trade de-escalation and improving Chinese demand – and in turn on the prospects for a higher USD/JPY. We lift our profile for USD/JPY to 110 on a 1M and 3M horizon. We keep our expectation of 112 on 6M and 12M, which reflects optimism on the global risk and growth outlook for next year and an expectation that we will not see a worsening – but rather an improvement – in US data over Q1. We see EUR/JPY as having effectively bottomed out after two years of cyclical compression and the 12M target has moved slightly higher (129)," Danske adds.