BofA Slashes Yen Forecast After Coordinated Intervention

Bank of America has significantly adjusted its year-end forecast for the dollar against the yen, citing coordinated intervention by US and Japanese authorities. The bank now predicts that USD/JPY will fall to around 149 by year end, down from a previous forecast of 152.

This move implies a roughly 6% appreciation in the yen, reversing its recent downward trajectory. The revised outlook follows joint action between the Federal Reserve and the Bank of Japan aimed at supporting the currency.

BofA analysts argue that sustaining the yen's gains will require additional macro policy support, particularly an acceleration in the BOJ's rate hiking timeline. A September rate increase rather than October would demonstrate the central bank's commitment to fighting upside inflation risk and bolster the credibility of the intervention effort.