By Areena FxThe recent announcement of the Bank of Japan (BoJ) exiting its negative interest rate policy after eight years initially disappointed the FX market. Analysts at Rabobank delve into the outlook for USD/JPY in the upcoming months.
Anticipated USD/JPY Level: 140.00 in 12 Months
Following the BoJ’s decision, the Japanese Yen experienced a sell-off, driven by a ‘sell on the fact’ reaction as investors absorbed the news. BoJ Governor Ueda’s inability to signal a series of interest rate increases alongside this week’s policy move contributed to market disappointment.
The BoJ’s actions regarding the virtuous cycle represent only one aspect of a broader series of changes and reforms that will influence the attractiveness of Japanese assets in the medium term.
Rabobank analysts foresee the potential for the Japanese Yen to recover moderately in the months ahead. They maintain a 12-month target for USD/JPY at 140.00.