BofA Sees Yen Strength, Predicts USD/JPY Crash to 149
The USD/JPY exchange rate has climbed back above 159.20, but analysts at Bank of America believe it's on its way down to 149 by year-end.
This is according to BofA's revised forecast, which cuts its end-2026 target from 152 to 149. The bank also expects the BoJ to increase rates in September and December 2026, followed by further hikes in March and July 2027, lifting its terminal-rate assumption from 1.75% to 2.00%.
BofA's strategist Shusuke Yamada said, 'We remain constructive on JPY and revised down USD/JPY forecasts this month.'
The bank believes the combination of direct intervention and faster monetary tightening has altered the balance of risks. If the Yen refuses to strengthen, however, the policy response could become considerably more aggressive.