USD/JPY Stuck in Neutral as Analysts Diverge on Yen Outlook

The Japanese yen's outlook remains uncertain as USD/JPY hovers around 158.50 to 159.50, with analysts divided on its future direction.

Despite a more tepid dollar mood at the start of the week, the yen stays under pressure due to an unchanged fundamental landscape.

Bank of America (BofA) previously predicted USD/JPY could track back towards 149 by year-end but has now revised its forecast to 149 from 152, citing a shift in balance risks against that view.

BofA notes quant signals indicating near-term JPY strength and option flow favoring JPY puts over EUR and AUD.

Goldman Sachs argues there could be further unwinding of yen shorts if the right conditions align, with positioning potentially flipping net long if the macro and market backdrop supports a stronger JPY.