FX BANK FORECAST · COVERAGE
Aggregated year-end forecasts, scenario shifts, and curated analyst notes from 38 institutional desks. No promotion.
UBS upgrades USD/JPY forecasts, citing elevated oil prices and Bank of Japan caution, contrasting with consensus expectations for yen appreciation.
UBS has raised its USD/JPY forecasts, arguing that higher oil prices will keep US inflation elevated and delay Fed easing, while the Bank of Japan remains hesitant to normalize policy aggressively. This combination supports a stronger dollar versus the yen.
The desk sees limited scope for yen appreciation near term, as Japan's energy import costs rise with oil and the BoJ maintains a cautious stance. UBS implicitly rejects the consensus view that the yen will strengthen to 147-150 by end-2026.
Our internal consensus for USD/JPY stands at 147.50 for December 2026, with a firm-level spread from 140 to 164—a significant 24-figure range. UBS's bullish dollar view diverges from the median, which expects yen gains.
Specific firm targets for Dec26 highlight the divergence: - JPMorgan: 164 - Goldman Sachs: 148 - Morgan Stanley: 140 - Barclays: 149
JPMorgan aligns with UBS's dollar-bullish stance, while Morgan Stanley is the most bearish on USD/JPY.
Among the banks in our coverage, JPMorgan stands out as aligned with UBS, forecasting USD/JPY at 164 for December 2026—well above consensus. This is the most extreme dollar-bullish call.
In contrast, the majority of firms see yen strength: - Morgan Stanley: 140 - Deutsche Bank: 143 - MUFG: 146 - BofA: 147 - Goldman Sachs: 148 - Barclays: 149 - ING: 152
Notably, Goldman Sachs and Barclays are close to consensus, while Morgan Stanley and Deutsche Bank are the most contrary, targeting significant yen appreciation.
How firms align with this view
Aligned with the desk view
Key takeaways
Market implications
The UBS revision adds to the bull case for USD/JPY, potentially supporting spot levels near 157. If other banks follow, yen depreciation could accelerate, challenging the consensus view of a gradual yen recovery.
Risks to this view
Key risks include a sharp drop in oil prices, a more hawkish BoJ shift, or Fed easing that reverses dollar gains. The wide dispersion in forecasts (140-164) underscores uncertainty around BoJ policy and global inflation.
| Firm | Stance | YE 2026 |
|---|---|---|
UOB | Bearish | 159.60 |
Bank of America | Bullish | 149.00 |
Rabobank | Bullish | 145.00 |
All 22 desk targets for USD/JPY
How we cover this story
USD/JPY trades 2.71% above the 24-firm Dec-26 consensus of 154.0, with a 25.5-point dispersion range signalling deep disagreement on the BoJ-Fed spread path.
Spot USD/JPY trades 2.81% above the 24-firm Dec-26 consensus of 154.0, with a 25.5-figure dispersion exposing deep disagreement on the BoJ rate path.
USD/JPY trades 2.65% above the 24-firm Dec-26 median of 154.0, with a 25.5-point dispersion range signalling deep disagreement on the BoJ-Fed spread path.
22 investment banks see USD/JPY at 154.17 by Dec 2026
View the live USD/JPY forecastING |
MUFG |
Mizuho |
BNS |