Citi analysts suggest that while the USD/JPY may briefly surpass ¥155, any sustained rally in the dollar against the yen could be capped by potential intervention from the Japanese government and anticipated rate hikes by the Bank of Japan.
USD/JPY breach of ¥155, Citi notes that the Bank of Japan may have a stronger incentive to raise rates to 0.5% in its upcoming December meeting to counterbalance yen weakness.
Despite current dollar strength, Citi maintains a bearish outlook for the USD/JPY in the longer term, suggesting limited upside for the pair heading into next year.
