JP Morgan raise their forecasts for AUD, NZD and for USD/JPY (EUR/USD unchanged) - investingLive
At a Glance
JP Morgan raised their forecasts for AUD, NZD and USD/JPY, but left EUR/USD unchanged. Our analysis contextualizes these revisions against consensus and other banks' views.
Key Takeaways
- 01JP Morgan raised USD/JPY forecast to 164 by Dec 2026, sharply diverging from consensus (147.5).
- 02JP Morgan left EUR/USD unchanged at 1.20, below consensus of 1.22 and above Morgan Stanley's 1.16.
- 03JP Morgan's yen call is the most bullish dollar consensus deviation among major banks.
- 04The firm's unchanged euro view indicates a rejection of the most bullish scenarios.
Full Analysis
What the desk is arguing
JP Morgan's latest forecast revisions for AUD, NZD, and USD/JPY reflect a bearish tilt on the yen and cautious optimism on commodity currencies. For USD/JPY, they raised their target to 164 by December 2026, standing contrary to the broad consensus that sees yen appreciation. This suggests they expect persistent dollar strength and delayed BOJ tightening.
For EUR/USD, JP Morgan kept their forecasts unchanged at 1.18 for March 2026 and 1.20 for December 2026, in line with the lower end of consensus. They appear to reject the more bullish euro scenarios proffered by Goldman Sachs and Deutsche Bank, instead seeing limited upside from current levels.
Where it sits in our coverage
Our internal coverage shows the EUR/USD consensus (median) at 1.22 for December 2026, significantly above spot at 1.15. JP Morgan's target of 1.20 is below the consensus and among the more bearish euro forecasts. The USD/JPY consensus targets 147.5 by December 2026, while JP Morgan stands out with a bullish dollar outlook at 164.
Specific firms' December 2026 targets: - JPMorgan: EUR/USD 1.20, USD/JPY 164 - Goldman Sachs: EUR/USD 1.25, USD/JPY 148 - Morgan Stanley: EUR/USD 1.16, USD/JPY 140 - Deutsche Bank: EUR/USD 1.25, USD/JPY 143 - BofA: EUR/USD 1.22, USD/JPY 147
How other firms see it
On USD/JPY, JP Morgan's hawkish stance is an outlier. Goldman Sachs, Morgan Stanley, MUFG, BofA, and Deutsche Bank all see the yen strengthening to between 140 and 148 by end-2026. Only JP Morgan holds a contrary view with a target of 164, which is 16.5 figures above the median.
On EUR/USD, JP Morgan aligns with Barclays (1.21) and ING (1.22) at the more conservative end, while Goldman Sachs and Deutsche Bank are more bullish at 1.25. Morgan Stanley is the most bearish at 1.16. JP Morgan's unchanged forecast suggests they see limited catalysts for a sustained euro rally.
Market Implications
JP Morgan's USD/JPY revision suggests they expect sustained USD strength and delayed BOJ normalization, which could pressure yen shorts. For EUR/USD, their cautious stance aligns with a market that remains short euros relative to consensus. These revisions may reinforce existing positioning trends.
From the original
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4 itemsJP Morgan raise their forecasts for AUD, NZD and for USD/JPY (EUR/USD unchanged) - investingLive
JP Morgan's upward revision of forecasts for AUD, NZD, and USD/JPY signals their confidence in bullish trends for these currencies, reflecting a potentially robust global economic recovery. In contrast, their unchanged forecast for EUR/USD suggests limited near-term volatility, signaling steadiness amidst evolving market dynamics.
Global FX: Yen intervention, re-assessing USD bearish view, central bank rundown
The desk sees a nuanced shift in the FX landscape, particularly regarding the Japanese Yen and the U.S. Dollar. Per the full note from J.P. Morgan, the recent intervention in the Yen and evolving views on the Dollar suggest a more balanced outlook, moving away from a purely bearish stance. The potential for further rate hikes from the Fed, coupled with Japan's intervention efforts, indicates a complex interplay of monetary policies that could affect currency valuations. As we assess these dynamics, the upcoming RBA meeting and U.S. payroll data will be critical in shaping market sentiment.
Turning bullish on EUR/USD - JPMorgan - Investing.com
JPMorgan has recently shifted its outlook on EUR/USD, becoming bullish on the pair amid expectations of increasing Eurozone economic strength and potential shifts in central bank policies. This optimism is underpinned by the bank's forecasts aligning with a consensus view that suggests a broader appreciation of the euro against the dollar over the next several quarters.
Global FX: Hawkish Fed & dovish BoJ force a Yen forecast rethink
The desk posits that the recent hawkish surprise from the Federal Reserve, coupled with a dovish shift from the Bank of Japan, necessitates a reevaluation of USD/JPY forecasts. Per the full note from J.P. Morgan, the Fed's stance has strengthened the dollar's outlook, while the BoJ's recent decisions have weakened the yen's position, leading to a potential shift in market dynamics. Current positioning suggests traders are recalibrating their expectations, particularly in light of the Fed's commitment to maintaining higher interest rates. This backdrop sets the stage for a more bullish view on USD/JPY, with the desk aligning closely with J.P. Morgan's forecast adjustments.
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