Deutsche Bank analyst James Malcolm says carry trades flowing out of Japan will amplify Abenomics and Fed tapering to boost USD/JPY as high as 120 in the year ahead.
They note that although CFTC data shows bets against JPY are at the highest in six years, net shorts remain well behind record extremes. They also note that many carry trade chasers have been reluctant to bit on yen weakness but that will change after year-end.
