J.P. Morgan
Global FX Strategy 2026
LIVE25 November 2025USD bearish
Back to CurrenciesBearish
USD/JPY
Spilled water cannot be gathered up
JPM Forecast Path
Cross-Firm Forecast Comparison
Key Drivers
BoJ rate path
MoF intervention stance
Fiscal balance deterioration
Global CB easing end
Carry trade positioning
All Firm Targets (Dec '26)
JPMBearish164.00
INGBullish152.00
BARCBullish149.00
GSBullish148.00
BofABullish147.00
MUFGBullish146.00
DBStrongly Bullish143.00
MSBullish140.00
Key Issues for 2026
1.Diminishing effect of BoJ hikes in curbing depreciation
2.End of easing cycles globally makes intervention less effective
3.FX policy: intervention zone 155-160 may not hold
4.Fiscal policy: FY26 budget expansion adds pressure
5.JPY carry trades could increase as carry builds
Risk Scenarios
Break above 162164+
No policy response at 161.95 cycle high, confidence in guardians declines
Intervention effective155-158
BoJ hawkish shift + MoF intervention below 162
Analysis Summary
End of easing cycle in rest of world is making Japanese policy actions such as rate hikes and intervention less effective in preventing JPY depreciation. Fiscal expansion also poses downside risks for the JPY. JPY short positioning is modest and could increase further as investors seek carry.