BofA Dovish on Dollar-Yen as US-Japan Coordination Boosts Yen Strength

Bank of America has reduced its year-end forecast for the dollar-yen exchange rate to 149 yen per dollar, citing joint foreign-exchange intervention by the US and Japan as a key factor.

The lowered forecast comes on top of an additional Bank of Japan rate hike, which is expected to support further yen strength. According to Bloomberg, BofA's previous forecast was 152 yen per dollar for year-end.

US participation in the joint intervention has removed a constraint under which Japan's foreign-exchange reserves determined the intervention limit.

BofA sees this development as a sign of shared goals between the US and Japan, with the ultimate aim of achieving long-term stability beyond short-term currency defense.