Weekly Citi's Forecast

Citi FX outlook

The fundamental backdrop remains bearish for JPY as – (1) UST yields continue to rise steadily leaving US – Japan rate differentials weighing on JPY; and (2) Japanese investor flows not favoring a stronger Yen – recent monthly data from Japan’s MoF do show Japanese investors turning net buyers of foreign bonds. The team remains bullish JPY vs USD, targeting a rising channel base at 109.11-15.

Previously

• USDJPY: 6 – 12 months: 112.0
• USDJPY: Longer term: 112.0

Currently (as of Oct):

• USDJPY: 6 – 12 months: 114.0
• USDJPY: Longer term: 112.0

MT Bias: Moderate bearish JPY vs USD; 

Modestly bullish JPY vs EUR 

Tactically moderately bearish JPY vs USD; 

Tactically bearish JPY vs Commodity FX (AUD, NZD & CAD), GBP and Asia EMFX (CNH & SGD)