Bank of America: Yen rises against the dollar

Bank of America has forecast that the Japanese yen will appreciate by approximately 6% against the U.S. dollar by the end of 2026, following coordinated intervention in the foreign exchange market. The yen is expected to strengthen to 149 per dollar from its current level of around 158, supported by joint action between the United States and Japan, and the prospect of the Bank of Japan raising interest rates in the coming months. The bank had previously projected the yen would reach 152 against the dollar by year-end. The Japanese yen had previously fallen to its lowest level in four decades, near 164 per dollar, before the United States and Japan intervened to support the currency, pushing it to approximately 155 per dollar. Jonas Goltermann, a money markets analyst at Capital Economics, stated that extended positioning, U.S. participation in the intervention, and the fact that the yen has historically been undervalued all suggest that the current round of intervention has a better chance of supporting the yen for a longer period than some previous rounds. The yen dipped slightly to 157.88 per dollar after declining for two consecutive sessions. The yen has now shed some of the gains achieved through intervention after touching 155.20 per dollar on Monday, but it remains far from the multi-decade low recorded last month at around 164.