Economists at Credit Suisse believe USD/JPY has seen an important peak in 2022 and look for further weakness to 127.47/27.

USD/JPY has established a major peak

“The surprise BoJ tweak to their Yield Curve Control (YCC) framework should further reinforce the likelihood for continued weakness into Q1 2023 and reinforce the view that we have seen a major peak in USD/JPY in 2022.”

“We maintain our target of 127.47/27, which is the 50% retracement of the 2021/2022 bull trend and more importantly the ‘neckline’ to the 2007/2022 base, and this is where we will look for a potentially important floor to define the lower end of a broad range.”

“Should weakness extend directly below 127.27 and key price support at 126.36, we would see scope for the sell-off to extend to the 61.8% retracement of the 2021/2022 uptrend at 121.44.”