Citi analysts suggest that while the USD/JPY may briefly surpass ¥155, any sustained rally in the dollar against the yen could be capped by potential intervention from the Japanese government and anticipated rate hikes by the Bank of Japan.
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USD/JPY breach of ¥155, Citi notes that the Bank of Japan may have a stronger incentive to raise rates to 0.5% in its upcoming December meeting to counterbalance yen weakness.
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Despite current dollar strength, Citi maintains a bearish outlook for the USD/JPY in the longer term, suggesting limited upside for the pair heading into next year.
This article was written by Eamonn Sheridan at www.forexlive.com.
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