Economists at Credit Suisse still see significant upside potential for USD/JPY after the completion of a major base above the 2019 and 2020 highs at 112.23/40. A further boost to the pair is also expected if US Bond Yields rise.
“We maintain our bullish outlook and look for the current range to be resolved higher, ideally early in Q1 2022 for a fresh leg higher to challenge its long-term downtrend from April 1990, now at 116.85.”
“Whilst we would be alert to a fresh phase of consolidation at 116.85 we look for a conclusive break later in the year, with resistance seen next at the 118.61/66 highs of December 2016 and with the ‘measured base objective’ ultimately at 122.90/123.00.”
“Rising US Bond Yields should also support the case for further USD/JPY strength as we continue to see a positively correlated relationship.”
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