A weak growth environment and a clear drop in bond yields should lift the Japanese Yen. Thus, economists at ING expect the USD/JPY to drop under 130 by late 2023.

Too early to expect the CNY to lead the Asian FX complex substantially higher

“While it is tempting to argue that some heavily hit European or Asian currencies are due a substantial re-rating next year, we believe such a conclusion is premature.”

“European currencies will struggle with a German economy re-orienting itself to a new world order, while it also seems too early to expect the Chinese Renminbi to lead the Asian FX complex substantially higher. Instead, a weak growth environment and a clear drop in bond yields should see defensive currencies like the Japanese Yen start to outperform.”

“We could see USD/JPY trading well under 130 by late 2023.”