National Australia Bank - "In our November 22 update to our yen views we argued that the forthcoming Japanese general election and the implications - one way or another - for the conduct of Bank of Japan policy were a game-changer for the yen. On top of the gathering headwinds to yen strength from Japan‟s deteriorating external payments position, we suggested that USD/JPY could reach Y86 by end- 2012 whereupon consolidation/partial retracement of yen weakness was likely pending the actual implementation of much more aggressive BoJ policies. These, we suggested, could be delayed pending the changing of the BoJ guard in March and April 2013 when the terms of the BoJ Governor and both of the current deputies expire. Thereafter, a move up to at least Y90 was likely later in 2013.

Given the move up to Y88 in the first week of January, there is obvious risk we are not going to see the sort of correction we previously suggested in early 2013, and too that our Y90 forecast or H2 2013 is too conservative. Our response is, ‘Quite possibly’. However, while we make some revisions to the yen forecast profile published in November, they are minor. We now think a correction in USD/JPY will be limited to the Y85.50-Y86 area. But we are holding to our view of USD/JPY reaching Y90 by year end and only rising consistently above this level in 2014."