USD/JPY has steadily declined from 157 to around 148 YTD, as narrowing US-Japan yield differentials and a volatile global investment environment have generally favoured the JPY, Danske Bank's FX analysts Kristoffer Kjær Lomholt and Filip Andersson report. 

USD/JPY to move towards 145

"The currency remains the second-best G10 performer against the USD this year, trailing only SEK. On Friday, we hit our soft target of 147 in our short USD/JPY trade from our FX Top Trades 2025, initiated on January 14. Given further upside potential for the JPY, we maintain our short position in USD/JPY and move the trailing soft target to 145."