Wells Fargo economists see the strengthening of the Japanese currency in the medium term, with the aim of reaching a USD/JPY exchange rate of 135.00 in the first quarter of 2024.
The Fed will stop raising rates in early 2023
“Although we anticipate that the strength of the US dollar will continue into early 2023, we see that the Japanese currency will strengthen in the medium term, and we believe that the USD/JPY exchange rate could reach the level of 135.00 in the first quarter of 2024.”
“Changes in economic fundamentals should be a more influential monetary driver than recent currency market interventions, and we believe the yen will be especially sensitive to changes in policy rates. Given that we expect the Fed to stop raising rates in early 2023, we see strong prospects for a stronger yen past that point..”
Source: Fx Street
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