UBS raises USD/JPY forecast, says another jump to 160 is possible - Investing.com UK
At a Glance
UBS has raised its USD/JPY forecast, suggesting that the pair could experience substantial upward momentum, potentially reaching 160 in the near term. This projection is grounded in expectations of ongoing divergence in monetary policies, particularly between the Federal Reserve and the Bank of Japan, which could sustain the dollar's strength against the yen.
Key Takeaways
Full Analysis
What the desk is arguing
The desk posits that the recent increase in UBS's USD/JPY forecast aligns with an overarching bullish sentiment for the pair driven by U.S. economic resilience. With the current spot at 157.0000 and the potential shift towards 160, the rationale appears to be heightened demand for USD amid solid domestic indicators and a relatively dovish stance from the BoJ.
Supporting this view, our internal coverage reflects a consensus forecast currently at 154.5000 for March 2026, although revisions from major firms suggest a strong possibility of higher targets. The market seems to be leaning towards a scenario where any rate adjustment by the BoJ will lag behind Fed policy, thus creating favorable conditions for USD appreciation.
Where it sits in our coverage
Our current consensus for USD/JPY is 154.5000 for March 2026, with a range that spans from 150.0000 to 157.0000. UBS’s upward revision resonates with a subgroup of banks that have forecast targets higher than the current consensus, but it still contrasts with more pessimistic views held by others within the market.
Specific firms such as JPMorgan and Barclays have set more ambitious projections at:
- JPMorgan: Mar26 157.0000, Dec26 164.0000
- Barclays: Mar26 155.0000, Dec26 152.0000
- Goldman: Mar26 155.0000, Dec26 148.0000
These targets indicate that several players share UBS's bullish outlook, albeit with slight variability in timelines and final target levels.
How other firms see it
The consensus among other banks presents a mix of optimistic and cautious perspectives towards USD/JPY. While some firms align with UBS's raised forecast, others maintain conservative targets reflecting potential headwinds.
- Goldman: Indicates a target of 155.0000 for Mar26, moderately aligned.
- Morgan Stanley: Holds a more bearish target, forecasting 150.0000.
- MUFG: Also suggests 153.0000 for March, indicating a mixed sentiment across the board.
Market Implications
Should UBS's forecast materialize, traders may position for further dollar strength ahead of any corrective movements from the BoJ. This could heighten volatility around key economic announcements and monetary policy signals from both the Fed and the BoJ as the market reassesses its views.
USD/JPY — All Desk Targets
| Firm | Stance | YE 2027 |
|---|---|---|
Goldman Sachs | Bearish | 165.00 |
UOB | Bearish | 163.00 |
Citi | Bearish | 163.00 |
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4 itemsUBS lifts USD/JPY forecast, yen seen stuck in 140–150 range amid political risks - investingLive
UBS has adjusted its USD/JPY forecast upwards, projecting the pair will remain within the 140 to 150 range due to persistent political risks influencing the Japanese yen. With the current trading spot at around 157, potential catalysts driving the yen's performance include domestic policy changes and international geopolitical developments.
UBS revised its USD/JPY forecast, anticipating currency volatility due to Japan’s political uncertainties - VT Markets
The desk anticipates increased volatility in the USD/JPY currency pair due to rising political uncertainties in Japan, as highlighted by UBS's recent forecast revision. Per the full note from VT Markets, these uncertainties could lead to significant fluctuations in the yen's value against the dollar. The desk notes that Japan's political landscape is becoming increasingly unpredictable, which could affect investor sentiment and positioning. With no major economic events scheduled in the next month, traders should remain vigilant for any sudden shifts in the political narrative that could impact the currency pair.
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