UBS raises USD/JPY forecast on elevated energy prices/ - Investing.com South Africa

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)