Economists at Credit Suisse now target USDJPY at 138.00 by the end of the fourth quarter. But a move to the 133.10 mark is on the cards. 

Levels around 143.00 will act as resistance for now

“Although the market has done a lot of work already in terms of pricing in only a 50 bps Fed hike in December, players will worry that the terminal rate can come still lower from current levels around 4.85%, towards 4.50%, if a second successive downside US core CPI surprise is seen next month. This leaves still more positioning vulnerability potentially exposed in coming weeks and brings us to set our end-Q4 USDJPY target at 138.00.”

“We assume this leaves open the door for a move towards 133.10, the 38.2% retracement of the 2021-22 USDJPY rally which also lies close to its 200-Day Moving Average.”

“We suspect levels around 143.00 will act as resistance for now.”