Against the backdrop of a continuously strengthening US dollar, the Japanese yen to US dollar (USD/JPY) exchange rate remains under pressure. On November 12, the dollar index exceeded the 106 mark, reaching a six-month high, pushing the euro/dollar to a one-year low as the dollar/yen rate approached the 155 mark. Wall Street strategists are generally bullish on the dollar, believing that Trump's potential re-election and the Republican Party's anticipated control of both houses of Congress will further support the dollar's strength.
According to strategic reports from JPMorgan, Goldman Sachs, and Citigroup, the dollar may continue to rise in the future, benefiting from potential U.S. inflation policies and expectations that the Federal Reserve might end the rate-cutting cycle early. However, the outlook on the yen's future appears more optimistic according to Rabobank.
Rabobank analysts believe that the depreciation trend of the yen might not persist. If the Bank of Japan raises interest rates further in the coming months, the yen might recover in a strong dollar environment. Analysts note, "This depends on the Bank of Japan's ability to continue withdrawing monetary stimulus," and the market currently expects the Bank of Japan to raise rates as early as next month. She anticipates that over the next 12 months, the dollar/yen exchange rate could fall from the current 154 to 140.
This outlook suggests that the yen's trend may depend on whether the Bank of Japan continues with its tightening policies, while the dollar's strong performance will also impact future forex market fluctuations. Analysts say that amidst increasing global economic uncertainty, changes in monetary policy will have a significant effect on the movements of the dollar and the yen.
