USD/JPY: Stability through H1, scope for modest Yen gains in H2 – Scotiabank

The Japanese Yen was one of the worst performing major currencies overall last year. Economists at Scotiabank forecast USD/JPY at 130 by the end of 2023.

Break below 129.50 could open up 121.45

“Our forecast for USD/JPY is consistent with the current Bloomberg consensus estimate for 2023 (130 in Q4) and the trend we expect to unfold reflects the broader outlook we have for the USD against the JPY’s major currency peers. In other words, stability close to current levels through H1, with scope for modest JPY gains developing through H2 as the Fed take its foot off the monetary brakes.”

“The long-term charts highlight 134.80/00 as resistance and 138.00/10 as major resistance above that point.” 

“Support is 129.50, with a drop to 127.25 (50% Fibonacci retracement of the 2021/22 rally) or possibly 121.45 (61.8% retracement) below there.”