BofA Sees Dollar-Yen Plunge to 149 by Year-End on Joint US-Japan Intervention
Bank of America has lowered its year-end forecast for the dollar-yen exchange rate to 149 yen per dollar, citing the prospect of joint US-Japan foreign-exchange intervention and another Bank of Japan rate hike. This move reflects a shared goal of long-term yen stability beyond short-term currency defense.
The bank's revised forecast takes into account the possibility of joint yen-buying intervention by the US and Japanese governments, which would support further yen strength. The US participation in this operation has removed a previous constraint, where Japan's foreign-exchange reserves determined the limit of any market operation.
BofA also revised its third-quarter forecast for dollar-yen to 153 from 154. A rate hike by the BOJ in September rather than October would send a stronger signal to markets that the bank is committed to tackling inflation, according to BofA.