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Yen’s Rapid Rebound Has Traders Eyeing 145 as New Worst Case

  • USD/JPY ranges lowered on view Fed hike pace to slow
  • Fed officials’ speeches this week may provide catalyst

Last week’s rapid resurgence in the yen has traders resetting their worst-case expectations for the once-embattled currency to around the 145 per dollar level.

The yen saw its best week since 2008, surging almost 6% against the dollar, as softer-than-expected inflation figures sparked a sharp unwinding of hawkish bets on Federal Reserve rate rises. But dollar-yen’s fall below 140 was likely too fast and too far, strategists said, with a Fed pushback against over-dovish rate expectations likely to put some pressure back on.