“The yen could breach its 2007 pre-credit crisis high of 125 versus the dollar if the Bank of Japan expands its aggressive asset purchase program further, a UBS research note said on Wednesday.
“The strongest upside risk to our new USDJPY forecasts will come if inflation remains stubbornly in deflationary territory despite the BoJ’s new easing this month,” wrote UBS economist Larry Hatheway.
“That will force the central bank to consider buying more assets in future including equities and even foreign bonds. In those scenarios, USDJPY would likely breach its pre-credit crunch 2007 highs of 125.” …”
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