USD/JPY: Bullish But Top-Heavy Market To Persist; Where To Target?

Bank of America Merrill Lynch FX Strategy Research still expects the USD/JPY to rise into year-end but the top-heavy market may persist for now as tensions over US politics and the North Korean situation may deepen into September.

Under such a scenario, Japanese investors are likely to provide mild but insufficient support while exporters can increase hedging as USD/JPY gets closer to their assumption level, which stood at 108.3 for the fiscal year in the June Tankan survey," BofAML argues.
In line with this view, BofAML targets EUR/USD at 111 by the end of September and at 115 by the end of the year.