USD/JPY remains top-heavy just below 145. Economists at MUFG Bank expect the pair to remain supported for now. The yen is set to star its recovery next year.

Dynamics driving yen weaker will ease in 2023

“It is hard to see a turn in USD/JPY now even after intervention by the MoF.”

“The Fed and global central banks have more tightening to do while the BoJ does nothing but ease. But we suspect the Fed should be in a position to pause after December’s hike while the terms of trade shock for Japan should subside next year and could coincide with a shift of some sort by the BoJ – all factors that will help the yen recover.”