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JPY: Citi See Potential for USD/JPY Bounce Toward Y155.00

JPY

Citi write that while upside for USD/JPY has been more limited than they originally thought, they maintain their view that the pair will not break below Y140 until next year, and could rebound to Y151-155.00.

  • They see markets as having priced a contracting US-Japan rate spread to ~4% ahead of time, meaning the next big decline in USD/JPY will occur after the actual spread itself narrows below 4%.
  • Their longer-term view looks for USD/JPY below Y140 in 2025, Y130 in 2026 and Y120 in 2027, but recognize there are downside risks to their forecasts.

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