Retaining a 3 month target of USD/JPY 112.00 - Rabobank

Analysts at Rabobank explained that for months the market has been largely ignoring the reassurances of the BoJ’s Kuroda that he remains fully committed to the BoJ’s huge QQE programme. 

Key Quotes:

"Strong growth in Japan and a tight labour market has raised suspicions that the BoJ could start to back out of this policy in the foreseeable future."

"However, CPI inflation in Japan remains well below its target and low inflation expectations are deeply ingrained in Japan’s nation psyche."

"It is our view that the market speculation that the end of QQE is nigh is premature."

"On the assumption that risk appetite stabilises we expect USD/JPY to recover some ground and head higher in the months ahead."

"We retain a 3 mth target of USD/JPY112.00."