USDJPY continues to deliver 20% annualised readings in volatility. In the view of economists at ING, the next big figures are likely to come to the upside. 

US 10-year Treasury yields will probably return to the 4.25/4.35% area before year-end

“We suspect the next five big figures in USDJPY come to the upside. We see this because the US 10-year Treasury yield typically only trades 50-75 bps below the Fed funds rate towards the end of the tightening cycle. And given that our team is looking for the policy rate to still be taken 100 bps higher, we think US 10-year Treasury yields will probably return to the 4.25/4.35% area before the end of the year.”

“Equally and once position adjustment has run its course, the Yen rather than the Dollar should become the preferred funding currency should market conditions begin to settle. Although that does seem an unlikely prospect right now.”