On April 20, analysts at Danske Bank believed that USD/JPY was overvalued and expected it to fall to 127.00 in the next three months.
“USD/JPY appears to be overvalued fundamentally, coupled with our base case for monetary policy tightening over the summer; we expect the pair to fall to 127 over the next three months. However, after a relatively hawkish Fed Against a dovish and BOJ backdrop, we could see some upside risks to the pair in the near term.”
“A rebound in global commodity prices poses an upside risk to USD/JPY as Japan is a net importer of energy. Overall, higher US Treasury yields continue to be a driver of USD/JPY, whatever the reason. “