Rabobank is maintaining its forecast for USDJPY to end the year at lower levels, citing Japan’s structural shifts, while flagging the Strait of Hormuz timeline as a key assumption underpinning the call.
Rabobank is maintaining its forecast for USDJPY to end the year at lower levels, citing Japan’s structural shifts, while flagging the Strait of Hormuz timeline as a key assumption underpinning the call. Summary: Rabobank has maintained its forecast for USDJPY to finish the year at lower levels, based primarily on structural changes underway within Japan, per the bank’s note The yen has been a weak performer year to date, continuing to be weighed down by its reputation as a funding currency, according to Rabobank Rabobank cautioned that currency intervention tends to be ineffective at reversing established trends and can create opportunities for speculators to add to positions at more attractive levels, per the note The bank’s year-end yen call is conditioned on the Strait of Hormuz reopening within weeks rather than months, with that timeline described as a key assumption in the baseline forecast, according to Rabobank Rabobank is holding its forecast for the yen to strengthen against the dollar by year-end, maintaining conviction in a structural Japan thesis even as the currency has remained one of the poorest performers in foreign exchange markets through 2026, with the Strait of Hormuz closure identified as the primary risk to that call.
The yen has struggled to escape its long-standing reputation as a funding currency, a designation that keeps it under pressure in risk-on environments as investors borrow cheaply in yen to deploy into higher-yielding assets elsewhere. That dynamic has persisted through the year to date, frustrating what Rabobank has consistently framed as a multi-year structural re-rating story rooted in changes taking place within Japan itself. The bank has not specified which structural shifts underpin its optimism, but the broader market context points to the Bank of Japan’s gradual policy normalisation and the domestic inflation dynamics that have accompanied it as the likely drivers of the longer-term yen constructive view.
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