Danske Bank FX Strategy Research notes that USD/JPY remains highly correlated with yields on 10-year US government bonds and risk appetite.
“A rise in geopolitical tensions could be JPY positive but need not be so if this derives from North Korea. Continued equity-commodity markets decoupling poses downside risks to USD/JPY if equity markets start to correct,” Danske argues.
However, Danske expects relative rates to move in favor of USD to outweigh the underlying fundamental USD/JPY depreciation pressure stemming from valuation and current-account flows.
In line with this view, Danske only sees a modest USD/JPY appreciation towards 112 in 1-3 months.
Source: Danske Bank Research
The article is published by one of the foremost sources of Forex trading information. Link to the original article above.
from Online Forex Trading Resource
View thesource article here