BBH: USDJPY rally above 137.50 setting up a test of the 140 level

USDJPY is maintaining bullish momentum, moving above 137. Economists at Brown Brothers Harriman (BBH) believe the currency pair is likely to hit last week's high, held at 140.

Earlier, USDJPY breached the level of 137.50. The market expects the pair to test last week's high at 140. 

Toyoaki Nakamura , a member of the Bank of Japan (BOJ) said that further monetary easing is needed as the economy is now recovering from the COVID-19 pandemic. Higher interest rates, in turn, would lead to greater deflation, as the country is still facing a negative output gap. At the end of his speech Nakamura noted that the time has not yet come to revise the course chosen by the BOJ. Politician's statements coincide with comments by Haruhiko Kuroda, governor of the Bank of Japan. This confirms the BBH analysts' view that the country's central bank has postponed its decision-making process.