USD/JPY to remain range-bound near term - Danske Bank

Analysts from Danske Bank see the USD/JPY pair trading mostly sideways within the 111.65-114.50 range near term, targeting 113 in 1-3M.

Key Quotes: 

“We expect US tax reform and USD liquidity to remain USD/JPY supportive in the short term but we still see USD/JPY trading mostly sideways within the 111.65-114.50 range near term, targeting 113 in 1-3M. While we still expect Fed-BoJ divergence, solid global growth and higher global yields (eventually) to support the cross, we see little potential for a substantial move higher over the medium term.”

“We target 114 in 6-12M, with risks increasingly skewed to the downside amid stretched short JPY positioning, further flattening pressure of the US yield curve and a weaker growth outlook in China.”