Deutsche Bank stated that if the Federal Reserve makes hawkish comments and the Bank of Japan maintains interest rates this week, the yen may fall to 1 USD to 157 JPY.
"The Bank of Japan remains inactive while the Federal Reserve makes hawkish comments, which could drive USD/JPY back to 157," wrote Deutsche Bank macro strategist Tim Baker in a report on December 17, "Inflation is accelerating, but slow central bank action seems to drive USD/JPY upwards."
"It is certain that the Bank of Japan has the ability to unexpectedly raise interest rates this week, which will at least initially boost the yen."
Note: USD/JPY rose 0.4% to 154.03 on Wednesday.