Goto Yujiro (後藤祐二朗), chief FX strategist at Nomura Securities, revised the end-2026 US dollar/yen outlook toward a weaker yen. The debate over a consumption tax cut is in focus, with the year-end assumption likely to be ¥147.50 per US dollar and the end-2027 forecast held at ¥140.
The US dollar/yen rate has been volatile since the start of 2026, but Nomura Securities has announced a revision toward a weaker yen on the view that the exchange rate will remain elevated. The debate over a consumption tax cut could be a factor in the near term.
The new year-end forecasts assume 1 US dollar = ¥147.50 at the end of 2026 and 1 US dollar = ¥140 at the end of 2027, retaining the latter forecast while assuming a weaker yen range than in the previous outlook as of March 2026. The table shows the new and previous yen exchange-rate forecasts from March 2026 through December 2027.
Based on the assumption that Federal Reserve policy and Japan's fiscal and policy developments will affect dollar/yen, the outlook indicates that the US dollar's weakening trend is likely to persist for the time being. Developments in the US-Japan interest-rate differential and the debate over a consumption tax cut are cited as risk factors.
As the debate over a consumption tax cut becomes a market focus, the possibility of fiscal and monetary policy under the Takaichi administration becoming more accommodative is viewed as limited, while some expect a stronger stance against yen weakness. From around midyear, attention will focus on the Bank of Japan's policy response if inflation accelerates again.
The US dollar/yen rate could remain elevated in the short term before moving below ¥150, and its course could change depending on future political developments and Bank of Japan appointments.