JP Morgan raise their forecasts for AUD, NZD and for USD/JPY (EUR/USD unchanged) - investingLive
JP Morgan raised their forecasts for AUD, NZD and USD/JPY, but left EUR/USD unchanged. Our analysis contextualizes these revisions against consensus and other banks' views.
What the desk is arguing
JP Morgan's latest forecast revisions for AUD, NZD, and USD/JPY reflect a bearish tilt on the yen and cautious optimism on commodity currencies. For USD/JPY, they raised their target to 164 by December 2026, standing contrary to the broad consensus that sees yen appreciation. This suggests they expect persistent dollar strength and delayed BOJ tightening.
For EUR/USD, JP Morgan kept their forecasts unchanged at 1.18 for March 2026 and 1.20 for December 2026, in line with the lower end of consensus. They appear to reject the more bullish euro scenarios proffered by Goldman Sachs and Deutsche Bank, instead seeing limited upside from current levels.
Where it sits in our coverage
Our internal coverage shows the EUR/USD consensus (median) at 1.22 for December 2026, significantly above spot at 1.15. JP Morgan's target of 1.20 is below the consensus and among the more bearish euro forecasts. The USD/JPY consensus targets 147.5 by December 2026, while JP Morgan stands out with a bullish dollar outlook at 164.
Specific firms' December 2026 targets: - JPMorgan: EUR/USD 1.20, USD/JPY 164 - Goldman Sachs: EUR/USD 1.25, USD/JPY 148 - Morgan Stanley: EUR/USD 1.16, USD/JPY 140 - Deutsche Bank: EUR/USD 1.25, USD/JPY 143 - BofA: EUR/USD 1.22, USD/JPY 147
How other firms see it
On USD/JPY, JP Morgan's hawkish stance is an outlier. Goldman Sachs, Morgan Stanley, MUFG, BofA, and Deutsche Bank all see the yen strengthening to between 140 and 148 by end-2026. Only JP Morgan holds a contrary view with a target of 164, which is 16.5 figures above the median.
On EUR/USD, JP Morgan aligns with Barclays (1.21) and ING (1.22) at the more conservative end, while Goldman Sachs and Deutsche Bank are more bullish at 1.25. Morgan Stanley is the most bearish at 1.16. JP Morgan's unchanged forecast suggests they see limited catalysts for a sustained euro rally.
How firms align with this view
Aligned with the desk view
Contrary positioning
Key takeaways
- 01JP Morgan raised USD/JPY forecast to 164 by Dec 2026, sharply diverging from consensus (147.5).
- 02JP Morgan left EUR/USD unchanged at 1.20, below consensus of 1.22 and above Morgan Stanley's 1.16.
- 03JP Morgan's yen call is the most bullish dollar consensus deviation among major banks.
- 04The firm's unchanged euro view indicates a rejection of the most bullish scenarios.
Market implications
JP Morgan's USD/JPY revision suggests they expect sustained USD strength and delayed BOJ normalization, which could pressure yen shorts. For EUR/USD, their cautious stance aligns with a market that remains short euros relative to consensus. These revisions may reinforce existing positioning trends.
Risks to this view
Key risks: (1) BOJ could accelerate tightening if inflation persists, driving yen gains that invalidate JP Morgan's view. (2) Eurozone recession or political risk could push EUR/USD below 1.15, making JP Morgan's target too high. (3) US fiscal deterioration could weaken the dollar, hurting their USD/JPY call.
EUR/USD — All Desk Targets
| Firm | Stance | YE 2026 |
|---|---|---|
MUFG | Bullish | 1.1800 |
Danske Bank | Bearish | 1.1100 |
UBS | Bullish | 1.1800 |
Sources & References
How we cover this story
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