ING: The JPY may rebound to the 135 level

On March 30, ING Bank economists believed that the easing of dovish Fed bets had boosted market sentiment and hit the yen asymmetrically.

USD/JPY could rally towards the 135.00 area, although we are inclined to see another dip in the pair in the short-term. With more upside risks to oil prices, oil-sensitive currencies could be well supported.

The loonie is also benefiting from a general improvement in sentiment in North America and Latin America, but lacks the support of domestic tightening policies, so the loonie’s rally may start to lose steam sooner than other currencies.