USD/JPY will overshoot regardless of whether the BoJ makes further adjustments – SocGen USDJPY Banks BOJ
“A 20-year regression of USD/JPY against the 5-year US/Japanese yield spread would suggest ‘fair value’ is 118 now, and given the tendency to overshoot, it’s more than a little tempting to conclude USD/JPY 115 is a reasonable target.
“I think YCC has had its day, because it now has a target on its back. That may, before we’re done, cause an overshoot in USD/JPY to the downside. For now, though, we like buying into Yen weakness, so we’ll wait and see if theInformation on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets.
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