ING analysts see Fed decisions and oil prices, not BoJ rate moves, driving USD/JPY to 158 by year-end despite intervention risks.
ING expects the Bank of Japan to hold its policy rate at 1.00% on 31 July, with any hawkish signals unlikely to shift the USD/JPY trajectory. The pair remains driven by energy prices and Federal Reserve policy, not BoJ actions.
Analysts forecast USD/JPY at 158 by year-end, assuming no further Fed hikes. Wednesday’s FOMC meeting could reinforce this view unless the Fed surprises dovishly or Brent crude falls to $70. Current levels near 163-164 are expected to persist ahead of the BoJ decision.
A breach of 165 could trigger FX intervention, with Japan holding $1.09 trillion in reserves. Authorities spent $70bn in April-May but prefer selling USD/JPY into a declining market for effectiveness.