UBS has stated that the fair value for USD/JPY in the short term is below 148.00, while levels above 152.00 indicate a stretched rate.
The firm highlights the importance of monitoring the yen's rapid and volatile movements, which have been influenced by speculative trading. It is advised for market participants to keep an eye on US interest rates, as they play a significant role in currency valuation. Attention should also be directed towards Japanese rates, particularly with the Bank of Japan's upcoming meetings on October 30-31 and December 18-19.
Although no immediate rate hike is expected, there are expectations for a potential increase in December. Despite the anticipation of intervention comments from Japanese authorities, recent communications have not expressed any immediate concerns regarding currency levels.