#USDJPY @ 132.947 needs more BoJ action to justify a big move lower – SocGen
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The Euro needs time, but the Yen still needs change, economists at Société Générale report.
“If/when uncertainty about the global macro and geopolitical backdrop decreases, EUR/USD should move higher. USD/JPY on the other hand needs more BoJ action to justify a big move lower unless Fed easing becomes a realistic short-term prospect.”
“If the BoJ does nothing, and Treasury yields don’t fall, USD/JPY will probably rise. We expect the next policy move in June, which doesn’t really suggest that USD/JPY will break out of its 128-138 year-to-date range.”
“We haven’t changed our forecast of an eventual move to USD/JPY 125, but a more aggressive BoJ adjustment than we expect could see another sharp bout of Yen strength.”
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