Nomura were looking for an end 2018 USD/JPY rate of 110 but have jacked that up to 115

  • by March 2019, USD/JPY to 118 (112 prior)
  • Mid-2019 they are looking for 122, from 115 previously
  • end 2019 120 (vs 110)

Nomura reasoning:

  • monetary policy divergence (Fed. vs BOJ)
  • USD/JPY to climb on stronger data from the US
  • BOJ messaging on keeping JGB yield target steady for an extended period to come … thus wider US / Japan yield spread to come
  • yen outflows on Japanese buying offshore assets; unhedged offshore investment