USD/JPY: Modestly Higher In 2018 With Exporters’ Sell Orders Around 115 – ABN AMRO

ANB AMRO FX Strategy Research discusses USD/JPY outlook in the coming year and sees only a modest move higher towards 115.

"Taking out this level of 115 will be difficult because exporters will probably have sell-orders around this level. One important driver of the yen versus the dollar is the spread between 10y US Treasury yields and Japanese government bond yields.

USD/JPY moves often in tandem with this spread. We expect this spread to widen in 2018 because of our forecast for a rise in 10y US Treasury yields to 2.6%. Japanese 10y government bond yields are being kept by the Bank of Japan, which is purchasing bonds to keep yields close to zero," ABN AMRO argues.

Source: ABN AMRO ResearchOriginal Article