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Apr 03 - 02:55 PM

ANZ: Revising USD/JPY Year-End Target

By eFXdata  —  Apr 03 - 01:30 PM


ANZ's analysis reveals that the Japanese yen (JPY) has historically benefited less from Federal Reserve rate cuts compared to other G10 currencies. The bank notes that while the JPY might gain against the US dollar (USD) in the short term following a Fed rate cut, these gains are generally limited and do not extend to other currency pairs like AUD/JPY or NZD/JPY. Given the lack of domestic and global factors that could significantly boost the JPY's performance in the near term, ANZ has adjusted its year-end forecast for USD/JPY from 136 to 145.

Key Points:

  • JPY's Limited Upside from Fed Rate Cuts: Historical trends show the JPY gains less from Fed rate cuts compared to other G10 currencies, with any upside typically short-lived.

  • Lack of Positive Drivers: Both domestic and global factors offer little support for the JPY becoming a top-performing G10 currency in the near term.

  • Speculation Around BoJ Tightening: Market speculation regarding further Bank of Japan tightening should be approached with caution, as it has not translated into sustained JPY strength.


Considering the JPY's historically limited gains from Fed easing cycles and the absence of strong domestic or global catalysts for appreciation, ANZ anticipates a higher USD/JPY rate by year-end, adjusting its forecast upwards to 145. This outlook reflects skepticism about the JPY's potential for significant outperformance in the near future.

ANZ Research/Market Commentary


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