UBS raises USD/JPY forecast, says another jump to 160 is possible - Investing.com UK

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.