Japan could fully open its borders and the BoJ could shift its ultra-loose monetary policy stance to alleviate pressure in the yen. This is not seen happening soon, and it is reflected in the spot FX market. Discussing levels is irrelevant when macroeconomic factors remain the same. The dollar/yen is like a kite with a broken string. The only way to stop is to wait for the moment when the kite is torn to pieces. When there are few yen buyers, there is no reason to believe it will stop at a certain level such as 147 to the dollar. We're looking at three potential catalysts, a sharp drop in natural gas and oil prices to reduce Japan trade deficit, policy changer from the BoJ and the country opening its borders. - J.P. Morgan
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