fundamental News - USD/JPY
The JPY to remain under pressure in 2022 primarily because US yields are poised to remain elevated as the Fed dials back asset purchases ... and starts to lift the Fed Funds target.
This will contrast with steady BoJ policy over the same time period
as the BoJ expects relatively flat economic activity in the near term
and CPI holding around zero.
Another JPY-negative consideration is the impact of firm/firmer
commodity prices which confer a negative terms of trade effect on the
currency.
we have to think that a sustained break above the mid 116s in the
next couple of months would make our 118 forecast for this year look
conservative. A final point to consider is that a weaker JPY might suit
the Japanese authorities as they try to coax
prices higher while a stronger USD will help restrain price growth in
the US. Stronger USDJPY gains may not encounter the verbal intervention
that has curbed sharp JPY moves in the past.