The Yen has been on the defensive early this year as soft Japanese data keep the Bank of Japan on hold and US economic trends show some resilience. That said, we still expect US growth to slow, the Fed to ease monetary policy, and US bond yields to fall, which should all support Japan's currency. 

We also view the BoJ as moving steadily and gradually toward policy normalization, forecasting a policy rate increase in April. Indeed, with Japan likely one of the few countries to go against the global monetary easing trend this year, we expect the Yen to perform more strongly as the year progresses, targeting a USD/JPY exchange rate of 141.00 by the end of 2024.