UBS raises USD/JPY forecast on elevated energy prices/ - Investing.com South Africa
At a Glance
UBS's upward revision of its USD/JPY forecast reflects expectations regarding persistently high energy prices, which are expected to exert upward pressure on the yen. This raises questions about the consensus outlook, particularly given the current spot rate of 157.0000 and the historical consensus forecasts that have been gradually declining.
Key Takeaways
Full Analysis
What the desk is arguing
The desk believes that USD/JPY may move higher, especially in light of UBS’s new forecast being anchored in real economic factors like energy prices. Sustained high energy prices could lead to a weaker yen as Japan's energy dependence makes it vulnerable to imported inflation.
Moreover, with the current consensus target for March 2026 sitting at 154.5000, there is a notable divergence between market expectations and UBS's raised outlook, suggesting that traders should reconsider their positioning in anticipation of further yen depreciation.
Where it sits in our coverage
The current consensus target for USD/JPY is 154.5000 with a range of 150.0000–157.0000. This aligns with the opinions of firms like Goldman and Barclays, which also forecast lower targets compared to UBS. The consensus reflects a broader expectation of a gradual strengthening of the yen over the coming months, but UBS's revision encourages a re-evaluation of this stance.
Specific firm targets for December 2026 indicate a generally bearish outlook:
- JPMorgan: 164.0000
- Goldman: 148.0000
- Morgan Stanley: 140.0000
How other firms see it
While UBS has adopted a bullish stance on USD/JPY, many firms remain cautious. Goldman and Morgan Stanley hold targets that suggest a more contained view, significantly lower than UBS's forecast, indicating skepticism over sustained weakness of the yen driven by energy prices.
- Goldman: 155.0000 (Mar26), 148.0000 (Dec26)
- Morgan Stanley: 150.0000 (Mar26), 140.0000 (Dec26)
- Barclays: 155.0000 (Mar26), 149.0000 (Dec26)
Market Implications
UBS's revision could shift market sentiment, prompting traders to reassess positioning especially amid rising energy costs. A shift towards a higher USD/JPY could lead to increased volatility if traders follow suit with new benchmarks.
USD/JPY — All Desk Targets
| Firm | Stance | YE 2026 |
|---|---|---|
Rabobank | Bullish | 145.00 |
ING | Bullish | 152.00 |
MUFG | Bullish | 152.00 |
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UBS raises USD/JPY forecast on elevated energy prices/ Investing.com South Africa
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UBS raises USD/JPY forecast on elevated energy prices/ - Investing.com
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