Nordea forecasts prolonged Japanese Yen weakness as US-Japan yield spreads and BoJ’s gradual normalization limit JPY strength.
USD/JPY is expected to remain elevated due to a sustained yield differential between US and Japanese bonds, alongside the Bank of Japan’s accommodative stance. The gap underpins the Yen’s weakness, with US yields significantly outpacing Japan’s.
While the BoJ is anticipated to normalize policy gradually, analysts doubt these steps will materially strengthen the JPY in the near term. Even adjustments to yield curve control are seen as insufficient to trigger a sustained rally.
Intervention risk exists if USD/JPY rises sharply, but Nordea’s forecast does not rely on repeated large-scale actions by Japanese authorities.