The Japanese Yen is set to strengthen during 2023, in the view of economists at HSBC.

If the BoJ tweaks its monetary policy, the JPY may strengthen further

“We believe the upward pressure on USD/JPY exerted by its yield differentials should cease when the Fed stops hiking.”

“If the Bank of Japan tweaks its monetary policy (not our economists’ base case), the USD/JPY pair may fall even harder.”

“A normalisation of extremes in valuation and improving Japan’s current account should also support the Japanese Yen.”