Rabobank forecasts USD/JPY at 158 in three months as softer US CPI data may curb dollar strength and intervention risks.
Rabobank expects the Federal Reserve to hold rates steady this year, weighing on the dollar and capping USD/JPY below 160. A softer US July CPI print could further weaken the greenback, reducing intervention risks from Japanese authorities.
The bank’s three-month forecast for USD/JPY stands at 158, assuming support for the yen amid shifting rate differentials. A rebound in US inflation or dollar strength could revive carry trade risks and pressure the yen toward 160 again.
Markets are pricing in a Fed pause, which may soften the dollar further if inflation data aligns with expectations. Japanese officials remain wary of excessive yen weakness fueling intervention concerns.