Yujiro Goto (後藤祐二朗), chief FX strategist at Nomura Securities, forecasts the yen at ¥154 per US dollar at the end of 2026. The view is based on expectations that overseas investors' demand for dollars will weaken and that the US-Japan interest rate differential will narrow.
The yen is expected to reach ¥154 per US dollar at the end of 2026. The yen is likely to strengthen and the dollar weaken as demand for dollars from overseas investors declines and the US-Japan interest rate differential narrows.
A breakdown of overseas investors' purchases of US securities from April through June shows that inflows into US government bonds were limited despite US long-term yields remaining high, in the mid-4% range. As unrealized gains on US investments swell amid a rise in share prices led by growth stocks, investors may intensify efforts to reduce their dollar exposure.
While the yen is expected to strengthen and the dollar weaken against the backdrop of a narrowing US-Japan interest rate differential, the adjustment in dollar-denominated assets may continue depending on investor trends.