BOJ outlook shift hasn't really translated to the yen - MUFG
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There's the saying that if something can't go up on good news, there's bound to be trouble up ahead. And the Japanese yen is definitely stuck in one of those situations. Even in times of risk aversion with equities retreating this week, the yen is not able to find much comfort. A
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4 itemsMUFG sees yen risk skewed weaker despite 80% BOJ hike odds
The desk interprets MUFG's analysis to imply a bearish outlook for the yen despite heightened expectations of a Bank of Japan (BOJ) rate hike, currently pegged at around 80%. Per the full note, the market appears to have fully priced in these rate hikes without tangible support for the yen, making it susceptible to pullbacks if the BOJ fails to meet elevated expectations or signals a dovish stance instead. This backdrop places USD/JPY near intervention-sensitive levels just below 160, heightening the risk of a reversal should the central bank's commentary be misaligned with market anticipations. The broader consensus on the yen remains cautious, with forecasts clustering around the 155.00 mark by December 2026.