USD/JPY: Danske Bank lowers its short-medium term forecast

In an analysis published today, Danske Bank lowers its forecast for the USD/JPY:

"We continue to expect the BoJ to combat the risk of deflation with aggressive easing, and we now expect the BoJ to cut rates by 0.2% in March, in response to weaker growth prospects and the risk of low wage increases.

In the short term, the BoJ could however find it difficult to fight the bullish pressure on the JPY with monetary policy, insofar as the currency remains supported by fundamental factors.

In the end, we have therefore decided to lower our forecast for the USD/JPY:

* 115 within 1 month, compared with 118 previously
* 116 within 3 months, compared with 120 previously
* 119 within 6-12 months horizon