UBS Keeps Neutral Stance on Japanese Yen Amid Hawkish Fed
UBS is maintaining a neutral stance on the Japanese yen despite recent joint foreign exchange intervention that provided temporary relief for the currency. The firm says the intervention has not altered the underlying upward pressure on the USD/JPY pair, citing a hawkish Federal Reserve and a Bank of Japan that continues to tighten policy gradually.
According to UBS, a sustained downtrend in USD/JPY would require softer US economic data that allows the Fed to ease its stance, combined with a more proactive Bank of Japan that restores confidence in yen stability. The firm forecasts USD/JPY will reach 160 by the end of 2026 and 158 by mid-2027.
UBS expects the USD/JPY pair will continue to trade in an elevated range, suggesting investors should be cautious when making decisions about their portfolios.