Danske Research maintains a structural bearish bias on USD/JPY.

"The backdrop has shifted in favour of a stronger JPY. A more hawkish BoJ, a meaningful repricing of the rate differential, and growing evidence of carry-trade unwinding have all been supportive of the JPY. While the near-term trajectory may admittedly remain more uncertain amid elevated energy prices, we think the structural case for USD/JPY to trend lower over a 12M horizon remains compelling," Danske notes.

"It rests on a convergence of forces – BoJ tightening, the Fed likely being closer to its peak than the BoJ, carry-trade unwinding, repatriation flows, and eventual normalization of energy prices – several of which are already in motion," Danske adds.