USD/JPY has re-approached the highs of the year consistent with its tight correlation with US interest rates. 120 remains the target of analysts at ING.

Bank of Japan remains resolutely dovish

“So far, the BoJ is one of the very few central banks to disavow the need for tighter policy.  BoJ Governor Kuroda has also seemed, surprisingly, to be welcoming a weaker JPY and not to be concerned over higher energy prices.”

“The door now seems open to 120.” 

The main risk is an extended equity correction should the Fed tighten too fast. Lower long-dated US yields would be the signal.”