Credit Suisse: How High Can USD/JPY Go? 'We now upgrade our USDJPY forecasts to 128 in 3 months and 130 in 12 months'

"From a USD perspective the key development longer-term is the break to new multi-year highs around 125.00 seen in USDJPY, which has corresponded with fresh widening in US – Japan rate differentials. Many observers see the JPY as no longer expensive from a valuation perspective. And Japanese monetary policy shifts are not likely to be in play for many months yet as the Nikkei continues to rise and a soft JPY provides still more stimulus."

"We are frustrated that we missed the latest move higher from a trade recommendation perspective, having decided that other USD longs in our recommendations portfolio gave us sufficient exposure, a decision that was clearly a mistake in hindsight. Dips towards 123.00 should be seen as a buying opportunity, in our view."

"We now upgrade our USDJPY forecasts to 128 in 3 months and 130 in 12 months from 122 and 127 previously."