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FX BANK FORECAST · COVERAGE
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Aggregated year-end forecasts, scenario shifts, and curated analyst notes from 30 institutional desks. No promotion.
FX BANK FORECAST · COVERAGE
Aggregated year-end forecasts, scenario shifts, and curated analyst notes from 30 institutional desks. No promotion.
The desk interprets Bank of America's recent revision of the USD/JPY forecast as a significant signal of a strengthening yen towards 2026. Per the full note, Bank of America has adjusted their projections to 147.00 for December 2026, indicating a more bullish outlook on the JPY amid a backdrop of potential shifts in global monetary policy and economic recovery in Japan. However, this view deviates from the consensus, which suggests greater bearishness, with a median target at 148.00 with a range from 143.00 to 164.00 across other firms. The desk sees this as a pivotal moment where traders should reassess positioning ahead of key economic indicators that could further impact these projections.
The desk frames this as a notable shift in sentiment towards the JPY, as Bank of America revises its forecast for USD/JPY to 147.00 by December 2026. This adjustment aligns with a broader narrative of yen strengthening as Japan’s economic conditions improve gradually, coupled with adjustments in monetary policy from the Bank of Japan.
Supporting evidence includes several recent revisions from other banks also reflecting a divided consensus on the yen's trajectory, with targets ranging significantly. For instance, Morgan Stanley anticipates a much weaker JPY, projecting 140.00 by December 2026, whereas JPMorgan holds a bullish position, forecasting a rise to 164.00 by the same time.
Our current consensus target for USD/JPY sees 148.00 by December 2026, within a range from 143.00 to 164.00. Notably, Goldman and Morgan Stanley are more pessimistic with targets set at 148.00 and 140.00 respectively while JP Morgan's projection at 164.00 represents the higher end of the spectrum, suggesting significant divergence in outlooks.
This latest revision from BofA puts it firmly at the lower end of expectations, prompting a reassessment of market positioning.
Aligned firms such as JP Morgan and Goldman continue to show bearish sentiments that contrast with BofA's bullish positioning for the yen. Meanwhile, Morgan Stanley projects a significant decline, indicating a divided market in terms of where USD/JPY will be by the end of 2026.
The implications of this discourse not only affect USD/JPY but also spill over into perceptions around other related pairs, including EUR/JPY and potential Bank of Japan policy decisions that might influence the broader G10 FX landscape.
How firms align with this view
Aligned with the desk view
Contrary positioning
Key takeaways
Market implications
Traders should watch for price action around the 148.00 level as it aligns with the broader consensus. Additionally, positioning ahead of potential announcements from the Bank of Japan regarding monetary policy could prove crucial in shaping the JPY outlook.
Risks to this view
A reversal of this call could occur if global economic conditions shift unexpectedly, leading to renewed strength in the USD or if Japan's economic recovery stalls. Furthermore, a sudden hawkish turn from the Bank of Japan could significantly impact the JPY performance.
| Firm | Stance | YE 2027 |
|---|---|---|
Goldman Sachs | Bearish | 165.00 |
UOB | Bearish | 163.00 |
Citi | Bearish | 163.00 |
All 23 desk targets for USD/JPY
How we cover this story
USD/JPY trades at 161.71, some 8.53% above the 23-firm median Dec-26 target of 149.0, with a 25-point dispersion signalling deep disagreement on the BoJ path.
USD/JPY trades 8.53% above the 23-firm Dec-2026 consensus of 149.0, with a 25-point dispersion that reflects sharply divergent BoJ and US rates assumptions.
USD/JPY trades at 161.71, 8.53% above the 23-firm median Dec-26 target of 149.0, with a 25-point dispersion that reflects deep disagreement on the BoJ-Fed rate-spread path.
23 investment banks see USD/JPY at 150.74 by Dec 2026
View the live USD/JPY forecastJPM |
UBS |
BofA |
CIBC |