The Japanese yen's future remains uncertain as global currency markets show a split in outlook. Bank of America (BoA) reports that 30% of fund managers anticipate the yen will outperform by 2026, driven by potential policy normalization in Japan. However, the yen has recently hit a nine-and-a-half-month low against the dollar due to near-term pressures.
This divergence is influenced by Japan's economic contraction in Q3 and expectations of continued monetary easing under Prime Minister Sanae Takaichi. Additionally, Finance Minister Satsuki Katayama's suggestions of a larger fiscal stimulus have sparked concerns about public finances and foreign exchange stability.
Yen Outlook Divided: BoA Predicts 2026 Rebound, MUFG Cautions on Weakness
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