USD/JPY could drop to 130 again with YCC adjustment – SocGen

According to SG’s FX team, the USD/JPY could drop to 130 again.

Yen should appreciate when money returns to Japan

If the BoJ adjusts its Yield Curve Control (YCC) range at its June policy meeting as we expect, the USD/JPY could drop to around 130 again as the JGB yield rises. 

Moreover, as a rule, the unwinding of foreign assets is bullish for the Yen. Net inflows into long-term bonds typically fuel Yen appreciation. We also think the USD/JPY could drop to 110 after 2025.