BofA cuts USD/JPY forecast to 152 (prior 157) and flags three triggers for yen bull turn

What the desk is arguing

The desk notes BofA's adjustment reflects a cautious optimism about the JPY, influenced by structural factors such as the narrowing loan-deposit gap and rising real interest rates in Japan. As BofA indicates, the ongoing trend of capital inflows could support the yen's recovery if these catalysts materialize.

Moreover, BofA's forecast reduction comes amidst market softness for the yen, suggesting that while there is no outright bullish call, the tone reflects a significant pivot from their previous bearish outlook. The past indications of suspected ¥10 trillion of FX intervention illustrate active measures from Japanese authorities to defend the yen as it nears critical levels.

Where it sits in our coverage

Our consensus target for USD/JPY aligns closely with BofA's revised forecast at 152, with a range spanning from 149 to 160. Noteworthy projections for December 2026 include: - jpmorgan: 164.0000 - goldman: 148.0000 - barclays: 149.0000

This neutral positioning from BofA sits at the lower end of the cross-firm spectrum, which suggests a divergence in views as some firms remain more optimistic about the yen's trajectory by the end of 2026.

How other firms see it

A number of firms align with BofA's cautious stance, particularly those predicting a stable to slightly bullish trend for the yen. These include goldman and hsbc with projections around 150. Conversely, firms like jpmorgan anticipate a more substantial recovery, up to 164.

The focus remains not only on USD/JPY but also on the implications from Japan’s monetary policy stance amidst ongoing developments in G10 rates, which could influence the broader outlook for other currency pairs such as USD/CHF and AUD/JPY.

What the calendar says

No high-impact events are scheduled in the next 30 days, meaning traders will need to look to economic indicators and market sentiment to guide their expectations for USD/JPY without imminent news drivers.