According to SG’s FX team, the USD/JPY could drop to 130 again.
If the BoJ adjusts its Yield Curve Control (YCC) range at its June policy meeting as we expect, the USD/JPY could drop to around 130 again as the JGB yield rises.
Moreover, as a rule, the unwinding of foreign assets is bullish for the Yen. Net inflows into long-term bonds typically fuel Yen appreciation. We also think the USD/JPY could drop to 110 after 2025.