According to the IMF, Japan needs to continue its accommodative and maintain long-term interest rate target. The Fund has also mentioned the increased downside risks to Japan, citing weaker global demand and uncertainty on trade as factors that could undermine growth. Though there was nothing new in the statements, this doesn’t bode well for the yen that struggles to resist the pressure from dollar bulls amid the persistent divergence.
In this context, the longer term outlook for the Japanese currency remains uncertain, with risks skewed to the downside amid low and bank of Japan’s commitment to accommodative . As such, the USDJPY could resume the ascent as soon as risk sentiment improves. The initial upside target lies at 114.70 and then at 115.00.