USD/JPY to decline below 140 on a 6-12M horizon – Danske Bank

Economists at Danske Bank expect the USD/JPY pair to nosedive over the coming months.

Turnaround in US yields to weigh on USD/JPY

We forecast USD/JPY to decline below 140 on a 6-12M horizon. This is primarily because we believe that long US yields have reached their peak. 

We expect yield differentials to be a tailwind for the Japanese Yen over the coming year. In addition, historical data suggests that a global environment characterized by declining growth and inflation tends to favour the JPY.