A note via MUFG on their outlook for USD/JPY. Analysts are targeting 143.00, arguing:
- they expect a weaker US dollar
- and see long JPY as the best way to capture this
They do note that USD/JPY has shown resilience with a wide differential in yield helping to keep yen weak
- but their short term valuation model suggests spot USD/JPY is "well over-valued"
- valuation model implies fair-value is 143.00
- see more reasons to short than long, that the timing for a big drop lower could be approaching