BofA Merrill Lynch on USDJPY: JPY's fundamental weakness likely to continue into 1H18

- JPY's fundamental weakness likely to continue into 1H18 but be manifested in USD/JPY rather than cross-yen due to 3 factors.
- (1) BoP, (2) Portfolio flow dynamics, (3) US real yield increase. We expect USD/JPY to peak out above 120.
- We expect BoJ to implement policy normalization in 3Q18, leading to a lower USD/JPY in 2H18.

07 Dec 2017 - 11:48- ForexEconomic Commentary- Source: BofA Merrill Lynch

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