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FX BANK FORECAST · COVERAGE
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Aggregated year-end forecasts, scenario shifts, and curated analyst notes from 36 institutional desks. No promotion.
FX BANK FORECAST · COVERAGE
Aggregated year-end forecasts, scenario shifts, and curated analyst notes from 36 institutional desks. No promotion.
UBS has revised its USD/JPY forecasts higher, citing rising oil prices and the Bank of Japan's cautious policy stance. This aligns with a hawkish USD view and challenges the consensus expectation of yen appreciation.
UBS raises its USD/JPY forecasts, driven by higher oil prices and the Bank of Japan's cautious stance. Higher oil prices boost USD demand as oil is priced in USD, while the BoJ's reluctance to normalize policy keeps yen carry trade attractive. The revision signals a sharper divergence from the consensus view that the yen will strengthen by year-end.
UBS implicitly rejects the view that the BoJ will accelerate tightening despite persistent inflation. Instead, it sees the BoJ maintaining ultra-loose policy, which combined with high oil prices, supports USD/JPY upside. This contrasts with the consensus median target of 147.5 for Dec26, which implies a strong yen recovery.
Our internal coverage shows a consensus median target of 147.5 for Dec26, but the firm spread is wide at 24 figures (from 140 to 164). Our published research highlights this dispersion and notes that the consensus is skewed bearish USD, yet UBS's revision to higher forecasts places it on the hawkish side of the spectrum.
Specific firms highlight the divide: JPMorgan has a Dec26 target of 164.00, the most bullish USD, while Morgan Stanley targets 140.00, the most bearish. Barclays at 149.00 and ING at 152.00 are closer to consensus but still below UBS's implied level if revised. The wide range underscores the uncertainty around BoJ policy and oil prices.
JPMorgan aligns with UBS's hawkish view, forecasting USD/JPY at 164.00 by Dec26, well above consensus. Morgan Stanley is the strongest contrary, targeting 140.00, expecting aggressive BoJ tightening. Goldman Sachs at 148.00 and Bank of America at 147.00 are aligned with the consensus bearish USD view, opposite to UBS.
Other firms like Deutsche Bank (143.00) and MUFG (146.00) lean slightly below consensus, while Barclays (149.00) and ING (152.00) are more neutral. The diversity of views reflects the high uncertainty in USD/JPY outlook.
How firms align with this view
Aligned with the desk view
Key takeaways
Market implications
The revision may prompt a reassessment of yen weakness scenarios, supporting USD/JPY upside and widening the divergence between hawkish and dovish forecasts. This could increase volatility and attract speculative flows, especially if oil prices rally further.
Risks to this view
BoJ more hawkish than expected could trigger sharp yen reversal, invalidating UBS's call. Also, a sudden drop in oil prices would reduce USD demand and pressure USD/JPY lower. Policy missteps by the BoJ or Fed could exacerbate swings.
| Firm | Stance | YE 2026 |
|---|---|---|
UOB | Bearish | 159.80 |
ING | Bullish | 152.00 |
Rabobank | Bullish | 145.00 |
All 23 desk targets for USD/JPY
How we cover this story
USD/JPY trades 2.05% above the 23-firm Dec-26 median of 156.0, with a 25.5-point dispersion that reflects deep disagreement on the BoJ rate path.
USD/JPY trades at 158.89, roughly 1.86% above the 23-firm median Dec-26 target of 156.0, with a 25.5-point dispersion signalling deep disagreement on the BoJ-Fed spread path.
USD/JPY trades at 158.98, roughly 1.91% above the 23-firm Dec-26 median of 156.0, with a 25.5-point dispersion signalling deep disagreement on the BoJ-Fed spread path.
23 investment banks see USD/JPY at 154.22 by Dec 2026
View the live USD/JPY forecastGS |
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