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Senior Analyst at Danske Bank Morten Helt believes the pair could trade within the 108-115 range in the medium to longer run.

Key Quotes

“The sell-off in the US and European fixed income markets is currently weighing on USD/JPY, and we expect the combination of portfolio flows, choppy market conditions and stretched short speculative JPY positioning to push USD/JPY lower going into fiscal yearend in Japan (on 31 March). We have thus revised our 1M and 3M forecasts lower to 104 in 1-3M (previously 112 in 1M and 113 in 3M)”.

“Over the medium term, we expect USD/JPY to gradually recover supported by continued solid global growth outlook and Fed-BoJ divergence. As such, we still see USD/JPY trading mostly sideways within the 108-115 range in 6-12M. We target the cross at 108 in 6M (previously 114) and 110 in 12M (previously 114)”.

source: fxstreet