MUFG Bank economists expect the Japanese Yen to post considerable gains next year.
The Ten will benefit significantly from the BoJ’s performance
We expect the BoJ to end yield curve control (YCC) and negative interest rates (NIRP) at the January meeting. That’s partially priced in, but the BoJ’s tone is likely to fuel expectations of further monetary policy tightening later in 2024.
We believe the Yen is the G10 currency most likely to outperform next year. The impact of global inflation is reversing and that has the biggest implications for the Yen, as even a partial reversal of the USD/JPY move from 115.00 to 150.00 implies considerable room for better results.
After such a large bullish move and given the attractive carry, short JPY positioning remains substantial, but once expectations of a trend reversal increase, there is a risk of a steeper and even stronger move for the Yen than we currently forecast.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
