UBS raises USD/JPY forecast, says another jump to 160 is possible - Investing.com UK
UBS has raised its USD/JPY forecast, suggesting that the pair could experience substantial upward momentum, potentially reaching 160 in the near term. This projection is grounded in expectations of ongoing divergence in monetary policies, particularly between the Federal Reserve and the Bank of Japan, which could sustain the dollar's strength against the yen.
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.
How firms align with this view
Aligned with the desk view
Contrary positioning
Key takeaways
- 01UBS raises USD/JPY forecast, eyeing a potential rise to 160.
- 02Current consensus for USD/JPY is 154.5000, with higher projections from several banks.
- 03Divergence in monetary policies drives expectations for USD strength against JPY.
Market implications
Should UBS's forecast materialize, traders may position for further dollar strength ahead of any corrective movements from the BoJ. This could heighten volatility around key economic announcements and monetary policy signals from both the Fed and the BoJ as the market reassesses its views.
Risks to this view
The primary risk lies in unexpected shifts in the monetary policy stance from the BoJ that could tighten funding conditions, thereby supporting the yen. Furthermore, any indications of economic slowdown in the U.S. might lead to corrections in USD/JPY forecasts.
USD/JPY — All Desk Targets
| Firm | Stance | YE 2027 |
|---|---|---|
Goldman Sachs | Bearish | 165.00 |
UOB | Bearish | 163.00 |
Citi | Bearish | 163.00 |
Sources & References
How we cover this story
Cross-firm research
USD/JPY Consensus Check: Spot at 161.71, Median Target 149 — Week of July 11, 2026
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 at 161.71: Consensus Targets 149.0 With a 25-Point Spread
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 Consensus Check: Spot at 161.71, Median Target 149.0 — Week of July 10, 2026
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.