UBS Raises USD/JPY Forecast: Oil Prices and BoJ Caution Trigger Yen Weakness - MEXC

What the desk is arguing

The yen appears increasingly vulnerable against the USD, particularly with factors like rising oil prices and BoJ's hesitance to alter its monetary policy stance pushing it further down. UBS's updated forecasts indicate a pessimistic outlook, coinciding with our internal assessment, which shows disparate targets across firms, reflecting a broad divergence in market sentiment regarding the yen's future.

As the BoJ maintains a cautious approach amidst this backdrop, the risks of continued yen depreciation seem to materialize. We reject the notion of an imminent recovery in the JPY, focusing instead on external pressures that could exacerbate its weakness through the remainder of this period.

Where it sits in our coverage

Our consensus target for USD/JPY stands at 147.5 for December 2026, while the range among firms showcases significant variance, notably with JPMorgan forecasting as high as 164. This disunity highlights varying risk assessments and expectations of economic recovery across the different institutions.

Specific targets from key firms illustrate this divergence: - JPMorgan: Dec-26 target at 164.0000 - Goldman: Dec-26 target at 148.0000 - BofA: Dec-26 target at 147.0000

How other firms see it

Several firms are aligning with an optimistic stance for USD/JPY, particularly JPMorgan, which maintains the highest target. However, firms such as MorganStanley provide a stark contrast, aiming for a much lower end of 140 by December 2026.

Their positions can be categorized as follows: - Aligned: - JPMorgan: 164.0000

• Contrary:
• MorganStanley: 140.0000
• Goldman: 148.0000