Analysts at Mitsubishi UFJ Financial Group Inc.'s (MUFG) are not expecting the yen weakness we've been seeing to carry on:
- Yen ... looks over-extended to the downside
Their forecasts for USD/JPY out for the next 12 months:
- Q3 2023 136.00
- Q4 2023 134.00
- Q1 2024 132.00
- Q2 2024 130.00
MUFG outline 4 reasons for the BOJ to pivot, saying
- Japan's equity market outperformance
- positive inflation in land and property prices
- high and sustained household inflation expectations
- underlying inflation at a level not seen since 1981
And this leaves:
- every BoJ meeting as live for a surprise policy change
MUFG conclude on the yen outlook:
- we see a BoJ shift in YCC and a Fed pause by September helping fuel a sustained turnaround
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BOJ dates ahead for the rest of this year:
