Despite BOJ hints of a December rate increase, analysts from top banks cite low Japanese yields versus U.S. as sustaining USD/JPY strength.
Market participants, including analysts from Bank of America, Nomura, and Royal Bank of Canada, continue to short the yen amid signs the Bank of Japan may raise rates in December. Citi’s yen “pain index” remains negative, underscoring prevailing bearish sentiment. Analysts attribute the USD/JPY bullish trend to significantly higher U.S. yields compared to Japan’s, making dollar assets more attractive.