Economists at Danske Bank expect the USD/JPY pair to plunge toward the 125 mark in the next three months.

BoJ tightening and valuation to send USD/JPY towards 125

“USD/JPY seems fundamentally overvalued and together with our base case of monetary policy tightening during Q2, we expect the cross to drop to 125 in 3M.”

“Hence, the development in Bank of Japan’s monetary policy stance is important to follow besides the usual US yields and oil price.”

“Forecast: 132 (1M), 125 (3M), 125 (6M), 125 (12M).”