BofA: Excess JPY supply this summer to drive USD/JPY toward 163

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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:

  1. Imbalance in JPY Demand/Supply:

    • Demand/Supply Imbalance: The supply of JPY is expected to outstrip demand, contributing to the yen’s underperformance relative to the US-Japan interest rate spread.
    • Toshin Inflows: Inflows to foreign equity Toshin (Japanese investment trusts) are accelerating, driven by new investors utilizing NISA (Nippon Individual Savings Account).
  2. Trade Balance Issues:

    • Trade Balance Struggles: Japan’s trade balance may struggle to recover due to lower auto production and higher energy imports, putting additional pressure on the yen.
  3. Political Risks:

    • Political Pressure: Political risks could further add to the downward pressure on JPY, exacerbating the imbalance in demand and supply.
  4. Revised Forecast:

    • Upward Adjustment: Given these factors, BofA has adjusted its USD/JPY forecasts upward. The new forecast for September 2024 is 163, up from previous projections.


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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This article was written by Adam Button at

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