Deutsche Bank is out with a note today talking about USD/JPY hitting 1.20.

The analysts at Barclays are less bullish. They forecast USDJPY to 110 in one month, 111 in three months and 112 in 6-12 months.

This is what they had to say:

  • Expectations of further easing due to a weaker macro backdrop, a stronger USD, and our substantially weaker EUR forecast have led us to delay indefinitely our expectations for the JPY’s “overshoot” to unwind.
  • We believe the Japan-centric factors have already been largely incorporated in the sharp move higher in USDJPY spot; hence, our new forecasts start from a much higher level and allow for only modest further JPY depreciation.
  • The significant revisions to our EUR forecasts allow for some further USDJPY upside without a deprecation of the JPY in real trade-weighted terms. However, a larger overshoot may imply a more aggressive rebound in the JPY beyond our forecast horizon.

For more bank trade recommendations, check out eFX Plus.