USD/JPY remains the stand-out interest. Economists at ING expect the pair to nosedive towards the 126.50 mark.

Plenty of downside in USD/JPY

“The BoJ may be on the verge of its biggest policy change in decades. Even short-dated JPY Interest Rate Swaps have started to move and are at the highest levels (near 30 bps) since 2008!”

“Clearly, USD/JPY has come a long way very fast, but some of the longer-term skews in the FX options market point to a structural shift in the market’s view in USD/JPY.”

“We suspect few will want to stand in the way of the USD/JPY downside.”

“126.50 looks like the clear near-term target for USD/JPY.”