USD/JPY: Any Yen selling over the near-term is unlikely to be sustained – MUFG

USD/JPY dropped a large 2% last Thursday for the biggest one-day drop since January. Economists at MUFG Bank analyze Yen’s outlook.

Any near-term renewed JPY selling will not last

The JPY move last week is likely to be a key marker that signals a turn in the trend of JPY depreciation, in place since the global inflation shock saw USD/JPY break sharply higher in March 2022.

We don’t see a BoJ hike this month but any JPY selling over the near-term is unlikely to be sustained given the changes in the global macro backdrop.