Yen at 85 Seen by Tokai Predicting BOJ Policy Miss: Japan Credit
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The Bank of Japan’s failure to achieve its inflation target will see the yen rebound to the highest since 2012, reversing the results of its unprecedented stimulus, according to Tokai Tokyo Securities Co.
The currency will strengthen beyond 85 per dollar “by this fall,” said Kazuhiko Sano, the chief bond strategist at Tokai Tokyo. The yen is trading within 1 percent of its fair value of 102.61 implied in the Organization for Economic Cooperation and Development’s measure of purchasing power parity and weakened beyond the threshold for the first time since 1985 last year. The currency surged 65 percent in four years to a record the last time it approached equilibrium in June 2007.