📝Revising 12-Month USD/JPY Forecast Lower to 135: Rabobank

The summary of the BoJ’s January policy meeting indicates that at least one member of the committee considers the current time to be a ‘golden opportunity’ to take policy action. The BoJ has taken a few steps towards normalising monetary policy since December 2022 by adjusting its yield curve control settings. Market surveys towards the end of last year pointed to April as the most favoured date for the first interest rate hike of the cycle, though some participants see risk of a move as soon as the next policy meeting on March 19. The outcome of Japan’s spring wage talks remains crucial. However, the window of opportunity for rate rises from the BoJ could prove limited given expectations for rate cuts from the Fed and other G10 central banks this year and given risks related to slowing global growth. Our forecast of a move to USD/JPY 135.0 on a 12- month view assumes a rate rise from the BoJ this year. Since risks of a spring rate rise appear to have strengthened further, we have lowered our 3-month USD/JPY forecast to 145.00 from a previous forecast of 146.00 - Rabobank