USD/JPY dropped below 149 yesterday, Danske Bank's FX analyst Jens Nærvig Pedersen reports.

USD/JPY is closing in a target of 147

"USD/JPY dropped below 149 yesterday in response to the sharp decline in oil prices and US bond yields that followed an overall deterioration in risk sentiment in financial markets."

"We recommended a short position in USD/JPY and the pair is closing in on our soft target of 147. Hence, the trade has performed well, but we think it has further to go."