Nomura raises its USD/JPY end-of-year forecast to 115.00

Nomura has raised their end-year forecast for the USD/JPY, calling for the Dollar-Yen pairing to hit 115.00 by December's end.

Key highlights

Nomura is also calling for the USD/JPY to reach 118.00 by March of 2019, up from their previous Q1 2019 call of 112.00, and analysts are also anticipating H2 2019 USD/JPY to be in the ballpark of 122.00, up from 115.00, with an end-of-year  2019 call of 120.00, revised upwards from 110.00.

Nomura pins their raised forecasts largely on the continued policy divergence between the US Fed and the Bank of Japan (BoJ), and the BoJ's calls to hold JGBs steady implies a growing yield spread as well, with Yen outflows from Japanese investors and businesses buying offshore assets further helping to drive the Yen down as offshore investment goes out of control in Japan.