Research Team at Nomura, notes that the USD/JPY depreciation accelerated during last week’s holiday in Japan, while speculative JPY long positions may have risen to an historical high. Key Quotes “As the pace of JPY appreciation has accelerated, Japanese policymakers have repeatedly said they are watching the FX market closely and that the movements have been rough. Their comments do not necessarily suggest FX intervention is imminent; the likelihood of a Bank of Japan (BOJ) easing at the next meeting in March is rising, in our view. As global risk sentiment remains fragile, USD/JPY can trade weakly for the time being. However, Japanese policymakers’ stance to avoid JPY appreciation and lower domestic yields will gradually support USD/JPY. A recovery to 118 by end-March is possible, in our opinion, if the ECB and BOJ ease in March, while more room for medium-term upside will depend on US economic data and the subsequent pace of Fed rate hikes.” For more information, read our latest forex news.