Rabobank forecasts USD/JPY at 159 in three months, contingent on faster BoJ hikes and a less hawkish Fed.
Rabobank’s analysis suggests the Japanese Yen (JPY) requires a more hawkish Bank of Japan (BoJ) to reverse its decline against the USD. Ministry of Finance (MoF) intervention alone is unlikely to shift USD/JPY without improved fundamentals or policy shifts.
The BoJ is reportedly open to accelerating rate hikes beyond its current six-month interval. Fiscal reassurances and a less aggressive Federal Reserve are also seen as critical for JPY strength. The July 31 BoJ meeting follows the Fed’s decision by two days, adding to near-term volatility.
A hawkish BoJ signal next week could provide an opportunity for further MoF intervention, potentially supporting JPY gains.