USD/JPY will fall by the end of the year – HSBC

FXStreet Insights Team FXStreet

Economists at HSBC think USD/JPY will fall by year-end 2023 on a range of factors from future BoJ policy announcements to improvements in Japan’s balance of payments and a revival of the JPY’s “safe haven” status.

A revival of Yen’s ‘safe haven’ status could weigh on USD/JPY

“There are many upcoming events that could lead to a change in the BoJ’s policy later. PM Kishida will likely nominate the next BoJ governor sometime in February. Governor Kuroda will chair his last monetary policy meeting on 10 March. The first result tabulation of Shunto (annual wage negotiations) will likely be announced around mid-March. The new governor will chair his first monetary policy meeting on 28 April.”

“Aside from the BoJ, there are other plausible developments that could drive USD/JPY lower in 2023: resident investors FX-hedging their foreign investments; an improvement in Japan’s core balance of payments due to JPY undervaluation and tourism resumption; and a revival of the JPY’s counter-cyclical nature and ‘safe haven’ status during risk-off episodes (as US yields fall).”

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FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

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