FXStreet (Córdoba) - Analysts from Lloyds Bank expect USD/JPY to recover toward the top of its current 116 - 125 range over the coming months. Key Quotes: “The yen has experienced a broad rally in recent weeks, as the deterioration in China and escalation of geopolitical tensions in the Middle East have damaged risk sentiment. Recent domestic data have been positive, but international developments pose a threat to exports. Partly in response, we have revised down our 2016 GDP forecast from 1.3% to 1.0%.” “At its December meeting, the BoJ left headline policy unchanged, with QE expansion remaining at an annual rate of ¥80 trillion. However, operational adjustments to monetary policy were made, including extending the average maturity of bond purchases and increasing ETF purchases. Our central view is that there is unlikely to be any further stimulus this year. However, this cannot be ruled out if the Chinese economy/global equities continue to weaken.” “Although there is a risk the JPY could continue to strengthen, this would likely be met by verbal intervention. But on balance, we believe the USD/JPY is oversold at current levels. An anticipated improvement in risk sentiment, recovery in the USD and fragile domestic data are expected to lead USD/JPY back toward the top of its current 116 – 125 range over the coming months.” For more information, read our latest forex news.