UBS lowers USDJPY forecasts to 145 by end-2025 and end-2026

Investing.com — UBS has revised its forecasts for the USDJPY, decreasing expectations to 145 for each end-2025 and end-2026, down from earlier estimates of 157 and 161, respectively.

This adjustment displays rising confidence within the Financial institution of Japan’s (BOJ) capability to implement additional price hikes, aligning with UBS economists’ name for a 25 basis-point hike in the course of the December 19 coverage assembly.

“Rising confidence within the BOJ’s capability to hike charges additional has been the important thing driver of the transfer,” UBS analysts famous, because the yen continues its latest outperformance in opposition to the greenback.

The revision to UBS’s USDJPY outlook additionally aligns with the financial institution’s broader FX buying and selling views. The agency stays quick EURJPY, anticipating it to say no to 151 by the top of 2025 and to 145 by the next 12 months.

Within the broader G10 FX market, UBS noticed a interval of stability in latest weeks, with the USD buying and selling close to mid-November highs.

This calm persevered regardless of President-elect Donald Trump’s tariff-related bulletins on social media. Whereas markets initially considered these proclamations as a negotiation tactic, UBS warned that this sentiment may be “short-lived.”

Moreover, political uncertainty in Europe, together with a no-confidence vote in opposition to the French authorities, might weigh on the euro.

“We see potential for a bigger and extra sustained affect now than in June, given the weaker progress backdrop and dovish ECB repricing,” UBS analysts defined. This case helps their end-2025 EURUSD goal of 1.04.