The deteriorating risk sentiment and recent rally in rates markets is leading to a pause in USD/JPY below the 130 psychological barrier. Nevertheless, the long-term trend is clearly to the upside in the view of analysts at Credit Suisse.

Scope for a rise into the 147.62/153.01 zone over the coming years

“USD/JPY is seeing its expected breather below the 130.00 psychological barrier and we continue to look for this to cap for now for a consolidation/pullback, with support at 125.09 ideally holding. A break would warn of a more prolonged pullback and a fall to 123.70/60.”

“Big picture, we remain of the view a secular base is forming to warn of a significant further rise over the coming years. Resistance above 130.00 would then be seen next at the 78.6% retracement of the 1998/2011 decline at 132.20, ahead of the 2002 high at 135.20.”

“We would see scope for a rise into the 147.62/153.01 zone over the coming years.”