Bank of America recommends closing USD/JPY longs as pair approaches 160 - Investing.com

What the desk is arguing

Bank of America (BoFA) is advising traders to abandon their long positions on USD/JPY as the currency pair approaches the psychologically significant 160 level. This recommendation is informed by the expectation of downward pressure, supported by structural elements in the Japanese economy and a global shift in interest rate dynamics.

With USD/JPY currently trading around 157, the firm’s forecast trajectory remains below the current spot and indicates a potential retreat in the currency pair over the near term. As such, the desk communicates a view that anticipates sustained tightening from Japanese authorities could continue exerting influence over the pair’s performance in the coming months.

Where it sits in our coverage

Our current consensus target for USD/JPY is 154.5000 for March 2026, reflecting a range between 150.0000 and 157.0000. This view aligns with the perspectives of several firms yet diverges from BoFA’s lower target for March 2026 at 154.0000 and a sequential decline to 147.0000 by December 2026.

Notably, other firms have varied outlooks with their December 2026 targets: - JPMorgan: 164.0000 - Barclays: 149.0000 - Deutsche Bank: 143.0000

How other firms see it

Some analysts remain optimistic about USD/JPY, with firms like JPMorgan projecting a rise to 164.0000 by December 2026, suggesting they are not as cautious as BoFA. Meanwhile, Goldman Sachs and ING are more aligned with consensus targets, aiming for more moderate levels of 148.0000 and 152.0000 respectively.

• Goldman Sachs: 148.0000 (Dec-26)
• ING: 152.0000 (Dec-26)
• Morgan Stanley: 140.0000 (Dec-26)