The Japanese yen has so far suffered from the fact that interest rate expectations are being pushed up for other central banks. This process should now be completed. USD/JPY should therefore stabilize, economists at Commerzbank report.

Yen to recover moderately in 2023

“We expect the revision of Fed interest rate expectations to expire and USD/JPY to stabilize. Then (and only then!) can the Japanese Ministry of Finance's threat of intervention take effect.”

“We expect the yen to recover moderately in 2023, when economic momentum is expected to weaken significantly elsewhere (especially in the US).”