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FX BANK FORECAST · COVERAGE
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Aggregated year-end forecasts, scenario shifts, and curated analyst notes from 37 institutional desks. No promotion.
FX BANK FORECAST · COVERAGE
Aggregated year-end forecasts, scenario shifts, and curated analyst notes from 37 institutional desks. No promotion.
The desk views the recent joint intervention by Japanese and US authorities as primarily a containment exercise designed to stabilize the USD/JPY pair without enabling a sustained sell-off of the dollar. Per the full note from ing-think, despite significant dollar supply—estimated between $70-80 billion—the dollar remains relatively stable, which raises questions about the market's expectations for the Federal Reserve's September policy meeting. The upcoming US jobs data is poised to influence this outlook, as traders anticipate that weak data could challenge the recent uptick in rate hike expectations, which currently price in around 16-17 basis points of tightening.
The desk posits that the joint intervention by the US and Japan might momentarily stabilize the yen, but it is unlikely to maintain a sustained impact on USD/JPY, especially given the current market perception surrounding Fed rate hikes. Per the full note, as the market digests this intervention, the broader dollar could remain underpinned until the outcomes of this week’s US jobs data, specifically the Non-Farm Payrolls report, are released.
Trading metrics signal that many participants are still betting on Fed tightening, as indicated by a rebound in rate hike expectations subsequent to Chair Kevin Warsh’s remarks last week. Currently, the market discounts nearly 16-17 bps of a potential Fed hike, reflecting a shift back to a somewhat hawkish outlook despite the intervention measures.
Our internal consensus for USD/JPY is currently pegged at 150.0, with a range from 140.0 to 161.7. Specific firm perspectives include deutschebank with a Mar-26 target of 153.0, jpmorgan projecting 157.0, and morganstanley at 150.0.
The desk's outlook aligns closely with deutschebank but leans towards the lower end of the spectrum, indicating a more cautious stance on yen appreciation amid ongoing interventions. Notably, the current target appears below the middle ground of estimated firm targets, suggesting a need for validation through data releases.
Many banks, including morganstanley and deutschebank, are supportive of a relatively weaker USD/JPY, possibly gravitating towards a tighter range as interventions take place. Conversely, rabobank holds a more aggressive position, forecasting a higher rate of 158.1725 for Mar-26, which contradicts more conservative estimates from firms expecting depreciation.
The trajectory of EUR/USD will likely respond to broader dollar narratives as market participants assess potential spillovers from the interventions. Additionally, tracking the yield differentials influenced by ongoing Fed policy is essential for predicting movements within the USD/JPY pairing.
How firms align with this view
Aligned with the desk view
Contrary positioning
Key takeaways
Market implications
Traders should watch the USD/JPY reaction closely around the forthcoming Non-Farm Payrolls report, expected this week. A poor data print could alter the rate hike narrative and trigger a more pronounced shift in dollar strength.
Risks to this view
The primary risk to this outlook would be unexpectedly strong US jobs data, which could bolster the case for a September rate hike and lead to a stronger dollar, thereby negating the effects of the intervention on yen stability.
| Firm | Stance | YE 2026 |
|---|---|---|
BNP Paribas | Bearish | 1.1500 |
UBS | Bullish | 1.1800 |
UOB | Bullish | 1.1800 |
All 30 desk targets for EUR/USD
Articles FX Daily: Joint yen intervention is a containment exercise Published 07:46 FX Share X LinkedIn E-mail Copy link Share X LinkedIn E-mail Copy link Download The FX week starts with traders bracing for another day of USD/JPY intervention from Japanese and US authorities. Despite a lot of dollars having been supplied to the market over the last three days – perhaps $70-80bn – the broader dollar is holding up quite well. Whether that continues to be the case will be a function of this week's US jobs data Chris Turner , Frantisek Taborsky and Francesco Pesole Joint US-Japan intervention is rare, but we doubt it drives USD/JPY sustainably under 155 USD: Market still buying into a Fed hike In theory, the dollar should be broadly weaker today after the US and Japanese authorities confirmed joint FX intervention (more below) and the Japanese probably sold $70-80bn over the last three days.
Lower oil prices should also be weighing on the dollar on reports from US President Donald Trump that negotiation, rather than military firepower, is Washington's preferred method of engaging with Iran. The fact that the dollar is not broadly weaker probably owes to the unresolved issue of whether the Federal Reserve will hike in September. Having briefly priced less than 10bp of tightening after Chair Kevin Warsh's press conference last week, that pricing has now bounced back to 16-17bp on the view that a failure to hike would lead to a further sell-off in the long end.
Here, US 30-year Treasury yields remain over 5.20% and the 30-year mortgage rate has risen to 6.75%. It seems the only way the Fed can avoid hiking in September is if the US data is poor enough. A major input to that decision comes this week in the form of US jobs data, including JOLTS job openings, ADP, and Friday's non-farm payrolls report.
On NFP, consensus is around +75-80k and probably not quite weak enough to rule out a Fed hike. In other words, the case for a sustained sell-off in the dollar has yet to be made. For today, the focus should be on a reasonably strong July ISM manufacturing release.
The DXY dollar index will be bounced around by the USD/JPY intervention story, but with decreasing marginal impact from this news story, we suspect DXY could find support near 99.35/40 and can break back above 100 this week. Chris Turner EUR: What to make of EUR/JPY intervention? EUR/USD should probably be doing better, buoyed by decent eurozone hard data last week , lower oil prices and lots of dollar selling from Japan.
The fact that it is not may partially be owed to the news that US authorities were checking rates in – and possibly selling – EUR/JPY on Friday. However, we doubt such news will have any lasting impact on the euro. For reference, the US Treasury only has around $13bn of euro-denominated FX reserves to sell ($1.2bn in deposits, $11.7bn in securities), which is barely a drop in the ocean compared to Tokyo's activity in FX markets and the size of global FX flows.
We suspect the US Treasury might have sold EUR/JPY – in effect raising yen investments at the Exchange Stabilisation Fund at the expense of the euro – to avoid having to explain to the US public why it was selling the dollar. The bigger and more lasting driver of the EUR/USD trend will be the Fed's September decision. That remains unresolved, and US data this week will have a big say if we end the week pressing 1.1615/20 resistance or trading back below 1.15.
Chris Turner JPY: Intervention as a containment exercise The big story here is participation from Washington in bilateral intervention with Tokyo. The Fed had checked rates – a precursor to intervention – back in January, but seems to have pulled the trigger on Friday. Why now?
Perhaps US Treasury Secretary Scott Bessent had felt that the weak yen was undermining JGBs, which, in turn, was weighing on Treasuries. Notably, Japan has intimated it will be using the Fed's new FIMA repo facility. This allows it to raise dollars against Treasury holdings rather than having to outright sell Treasuries to undertake intervention.
There is a lot to say on this subject, but what does it mean for USD/JPY prospects? This intervention does not change the fundamentals of a Fed close to hiking and Tokyo running a loose set of monetary and fiscal policies, which are weighing on the yen. We struggle to see this bilateral action driving USD/JPY sustainably below 155.
But equally, it does serve as a containment exercise, limiting investors from chasing USD/JPY through 160 and buying time for Tokyo to introduce more yen-positive policies. These could include more incentives to invest in Japanese domestic assets. Chris Turner CEE: Better mood helps regional currencies but koruna may lag The new month starts with a fresh data calendar, led by Turkey today.
We expect July CPI inflation at 1.7% month-on-month, bringing the annual rate down to 31.7% from 32.1% in the previous month. On a seasonally adjusted basis, which the central bank monitors closely, we expect July inflation to move back above 2%, closer to the average seen over the past two years. On Wednesday, the Czech Republic will release July inflation, which we expect to rise from 1.5% to 1.7% year-on-year, driven by higher fuel prices after the end of the reduced diesel excise tax and margin cap at fuel stations.
The Czech National Bank meeting follows on Thursday, where rates are likely to stay unchanged at 3.75%; the focus should be on the new forecast and forward guidance, which we expect to be dovish relative to market pricing. Hungary will publish July inflation on Friday, and we expect a further decline from 1.7% to 1.2%, below both market expectations and those of the National Bank of Hungary. As in recent weeks, Middle East headlines are setting the tone at the start of the week.
The lack of further escalation points to a more constructive mood in the days ahead, while new highs in EUR/USD should support some gains in CEE currencies. EUR/HUF touched local highs near 365 on Friday, driven by global risk-off and news from Hungary about the temporary closure of a nuclear power plant, which could affect both industrial production and energy imports. Given its current sensitivity to global risk sentiment, the forint could benefit the most in the region, followed by the Polish zloty.
By contrast, EUR/CZK remains largely driven by the interest-rate differential, and this week’s CNB meeting should deliver a dovish tone, pushing EUR/CZK above 24.250. Frantisek Taborsky Content Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument.
Read more Share X LinkedIn E-mail Copy link Share X LinkedIn E-mail Copy link Download Authors Chris Turner Global Head of Markets and Regional Head of Research for UK & CEE Chris is Global Head of Markets and Regional Head of Research for UK & CEE. Together with his team, he provides short and medium-term FX recommendations for ING's corporate and… Frantisek Taborsky EMEA FX & FI Strategist Frantisek is an FX & FI Strategist covering EMEA markets, having joined the bank in 2022. He provides short- and medium-term recommendations for ING's corporate and institutional client… Francesco Pesole FX Strategist Francesco is an FX Strategist and has been with the firm since May 2019.
His main focus is on the G10 space and, in particular, on European and commodity currencies. He began his career at Credit… In this article USD: Market still buying into a Fed hike EUR: What to make of EUR/JPY intervention? JPY: Intervention as a containment exercise CEE: Better mood helps regional currencies but koruna may lag
How we cover this story
Fed hawkishness creating fresh EUR/USD selling pressure suggests market repricing higher-for-longer USD rates relative to ECB policy trajectory.
Rising yields supporting USD strength; EUR/USD trading below 1.15 suggests market repricing of relative rate differentials favors dollar appreciation.
Hawkish Fed guidance supports USD strength and widens rate differential favoring dollar positioning into week-end.
USD/JPY trades at 157.07, roughly 3.3% above the 23-firm median Dec-26 target of 152.0, with a 25.5-point dispersion signalling deep disagreement on the BoJ rate path.
Cable trades 1.51% below the 20-firm median Dec-26 target of 1.36, with a 0.26-point spread from Citi's 1.24 floor to UBS's 1.50 ceiling.
USD/JPY trades at 156.89, 3.22% above the 23-firm Dec-26 median of 152.0, with a 25.5-point dispersion signalling deep disagreement on the BoJ-Fed spread path.
30 investment banks see EUR/USD at 1.1639 by Dec 2026
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