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Bank of America anticipates that an imbalance in the demand and supply of the Japanese yen (JPY) this summer will contribute to USD/JPY reaching 163 by September 2024. Various factors, including increased investments in foreign equities, trade balance struggles, and political risks, are expected to exert downward pressure on the yen.
Key Points:
Imbalance in JPY Demand/Supply:
Trade Balance Issues:
Political Risks:
Revised Forecast:
Conclusion:
BofA sees an excess supply of JPY this summer as a key driver for USD/JPY reaching 163 by September 2024. Accelerated investments in foreign equities, a struggling trade balance, and political risks are expected to contribute to the yen’s continued depreciation. The bank has adjusted its forecast to reflect these dynamics, anticipating further yen weakness in the coming months.
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