Citi forecasts USDJPY to return to ¥145/$ amid trade talks By Investing.com - Investing.com UK
At a Glance
Citi's forecast for USDJPY to return to ¥145/$ hinges on anticipated developments in trade negotiations, signaling potential shifts in market sentiment. This projection, however, stands in stark contrast to broader expectations, where the median forecast for USDJPY remains significantly higher.
Key Takeaways
- 01Citi forecasts USDJPY at ¥145, driven by trade talks.
- 02Current consensus sees the pair much higher, indicating diverging views.
- 03Several firms remain skeptical of a substantial drop in USDJPY.
Full Analysis
What the desk is arguing
Citi is positioning itself bullishly on USDJPY, anticipating a retreat to ¥145 as trade talks progress between the US and Japan. This outlook suggests a more favorable view of the USD, likely fueled by expectations of improved economic conditions bolstered by trade agreements.
However, this forecast challenges the current consensus, which suggests only a gradual decline towards ¥147.5 by the end of 2026, indicating that many analysts expect the pair to maintain upward pressure rather than retreat sharply.
Where it sits in our coverage
Our consensus target for USDJPY currently stands at 147.5, with a median forecast range between 150.0 and 157.0. Citi’s ¥145 target significantly diverges from this, suggesting it may require a sizable shift in fundamentals or market sentiment to be realized.
Specific firms contributing to our consensus include:
How other firms see it
The outlook in the market is mixed, with several firms expressing skepticism toward Citi's bullish sentiment. In particular, MorganStanley has a target of ¥140 by Dec 2026, positioning a cautious view on the yen against the dollar.
Other firms maintaining similar cautious perspectives include:
- DeutscheBank: projecting ¥143.0 by Dec 2026
- BofA: forecasting ¥147.0 by Dec 2026
Market Implications
If Citi's forecast materializes, it may lead to significant reallocation in portfolios heavily weighted towards USDJPY. A move towards ¥145 could also trigger adjustments in interest rate expectations and influence the Bank of Japan's policy considerations amidst changing trade dynamics.
From the original
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