US Dollar To Yen Outlook: Medium-Term Dollar Losses, June 2026 USD/JPY Forecast 136 - Exchange Rates Org UK

What the desk is arguing

The desk frames this as a significant shift in the USD/JPY dynamic, with the dollar expected to weaken against the yen over the medium term. This perspective is bolstered by anticipated changes in the Federal Reserve's monetary policy, which may lead to a decrease in dollar demand as interest rates stabilize or decline.

Supporting this view, the commentary notes that the USD/JPY could reach 136 by June 2026, reflecting a broader trend of dollar depreciation amidst potential economic headwinds. The desk believes that market positioning is already beginning to reflect these expectations, with traders adjusting their strategies accordingly.

Where it sits in our coverage

Our consensus target for USD/JPY stands at 1.075, with a range between 1.04 and 1.12. Specific firm targets include: - jpmorgan: 1.10 (Mar26) - bofa: 1.04 (Mar26)

This view diverges from the cross-firm consensus, with bofa projecting a more bearish outlook at the lower end of the range. The desk's call is notably at the upper bound of the spread, suggesting a more optimistic view on the yen's strength against the dollar compared to some peers.

How other firms see it

Firms like jpmorgan and others are aligned with the desk's outlook, anticipating a weaker dollar and a stronger yen in the medium term. Conversely, bofa presents a contrary stance, expecting the dollar to hold its ground against the yen at lower levels.

Traders should also monitor the EUR/USD trajectory as it may reflect similar pressures from the European Central Bank's policy decisions, which could spill over into USD/JPY dynamics.

What the calendar says

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