The yen weakens again as markets test authorities’ resolve, with Westpac forecasting prolonged pressure until at least 2027.
USD/JPY climbed back above 159, erasing gains from last week’s joint US-Japan intervention that pushed the pair down to 155. The reversal signals markets are probing for the next line of defense, keeping volatility elevated without altering the broader trend of yen weakness.
Earlier this month, coordinated yen-buying efforts drove USD/JPY from a peak of 164 to 155, but the move proved short-lived. Westpac expects the pair to settle closer to 160, with further declines unlikely before late 2026, citing structural imbalances that persist even in long-term projections.
Without additional intervention or a shift in US rate expectations, the yen’s recovery remains distant. The bank’s outlook suggests only modest declines through 2028, underscoring the scale of the yen’s divergence from historical averages.