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

What the desk is arguing

The recent adjustment in UBS's forecast for USD/JPY underscores an evolving outlook, primarily influenced by surging oil prices and ongoing BoJ caution which may hinder yen strength. As oil costs escalate, Japan's trade balance could come under pressure, amplifying demand for US dollars against the yen.

Moreover, the prevailing consensus among analysts has illustrated a wide divergence in projections, trending towards weaker yen forecasts. While some firms anticipate possible yen resilience, the majority signal a more bearish sentiment, preparing for further depreciation of the Japanese currency.

Where it sits in our coverage

Currently, our consensus target for USD/JPY stands at 147.5000 for December 2026, with a range of 150.0000 to 157.0000 for March 2026. This forecast suggests a generalized expectation for yen weakening, although our view slightly aligns with current levels yet diverges from the more optimistic outlook presented by UBS.

Specific firms have also published their targets for December 2026, indicating a mixed sentiment: - JPMorgan: 164.0000 - Goldman: 148.0000 - MUFG: 146.0000

How other firms see it

Analysts across several institutions reflect a consensus shift, with many leaning towards a weaker JPY forecast. For instance, Goldman and ING both align closely with expectations of continued depreciation, reflecting a cautious method in their projections.

In contrast, certain firms like JPMorgan remain more optimistic about the yen's capacity to hold its ground at higher levels through 2026, suggesting potential volatility in market responses to central bank actions and global economic developments.