USDJPY to see a staggered and partial unwind of 2022’s gains to 136 by end-2023 – Westpac

In the view of economists at Westpac, the Jpapense Yen has capacity to reverse recent losses, at least partially. They forecast USDJPY at 136 by the end of next year.

USDJPY seen at 126 by the end of 2024

“Although we expect the Yen to benefit from the coming US Dollar downtrend, it is likely to lag, with risks to remain skewed against the currency.” 

“Unsurprisingly, the Bank of Japan continues to dismiss any and every call for even a hawkish bias let alone a policy tightening. Interest rate differentials with the rest of the world are then set to remain wide for the foreseeable future.” 

“What the Yen has on its side is the chance to benefit from the economic development of Asia. If Japanese industry leverages this momentum, activity gains could support a material reversal in Yen, along with risk sentiment. For the time being however, we remain cautious, forecasting only a staggered and partial unwind of 2022’s USDJPY gains, from 148 to 136 and 126 end-2023 and end-2024. It is worth repeating that risks to this view are skewed up (i.e. towards a weaker Yen).”


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