BofA cuts year end dollar/yen forecast to 149 after intervention
BofA's revised forecast signals growing conviction among major banks that coordinated intervention has genuinely shifted the yen's trajectory rather than offering only temporary relief. A roughly 6% appreciation call by year end implies traders should expect sustained downward pressure on USD/JPY rather than a snapback toward prior highs near 158. The bank's emphasis on timing, specifically a September rather than October BOJ move, suggests currency markets will be highly sensitive to any signals on the central bank's rate path in the coming weeks. If the BOJ fails to follow through with faster tightening, the credibility of the intervention could come into question, risking a partial reversal of the yen's recent gains.
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BofA says coordinated intervention and a likely September BOJ hike put the yen on track for its strongest year end position in this forecast cycle.
Summary:
- BofA has cut its year end USD/JPY forecast to around 149, down from a prior call of 152
- The bank expects the yen to appreciate by roughly 6% by year end, following coordinated US Japan currency intervention
- USD/JPY is seen falling from around 158 currently to the revised year end target
- Analysts including Shusuke Yamada say the intervention raises the bar for a successful defence of the yen
- BofA says intervention likely needs to be followed by macro policy action, specifically faster BOJ rate hikes
- The bank suggests a September rate move, rather than October, would let the BOJ show it is ahead of upside inflation risk
Bank of America has lowered its year end forecast for the dollar against the yen, pointing to coordinated intervention by US and Japanese authorities as a turning point for the currency pair.
In a note published Wednesday, BofA analysts including Shusuke Yamada said they now expect USD/JPY to fall to around 149 by year end, down from a prior forecast of 152. The bank's revised call implies the yen could strengthen by roughly 6% from current levels of around 158, a notable shift in outlook driven largely by joint action from US and Japanese authorities aimed at supporting the currency.
BofA said the intervention itself raises the bar for what counts as a successful defence of the yen going forward, suggesting markets will now expect follow through rather than a one-off move. The bank argued that sustaining the yen's gains will likely require additional macro policy support, specifically an acceleration in the Bank of Japan's rate hiking timeline.
According to the note, a rate increase in September rather than October would allow the BOJ to demonstrate it is staying ahead of upside inflation risk, reinforcing the credibility of the broader intervention effort. That framing places significant weight on the central bank's next policy meeting as a test of whether authorities can back their currency action with substantive tightening.
The revised forecast reflects a broader shift in how major banks are positioning for the yen heading into year end, with BofA's outlook now anticipating sustained appreciation rather than a return toward recent highs. Markets are likely to watch upcoming BOJ commentary and any further signs of coordinated intervention closely, given how central the timing of policy action is to BofA's updated view.
This article was written by Eamonn Sheridan at investinglive.com.提供 MainLink：Investinglive RSS Breaking News Feed
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