UBS strategists point out that the yen's decline will continue, potentially weakening to 175 by the end of the year

Why does AI · UBS predict that the yen’s depreciation trend is difficult to change?

According to Caixin, on April 2, UBS strategists pointed out that even if Japanese officials increase verbal interventions, the yen’s decline is expected to continue. If oil supplies remain constrained, the USD/JPY exchange rate could depreciate to 175 levels by the end of the year.

In a report released on that day, UBS strategists mentioned: “If oil prices rise to $150 per barrel, using exchange rate interventions to curb inflation might instead provide the market with opportunities to sell the yen on rallies, resulting in the depletion of foreign exchange reserves, but not necessarily changing the yen’s depreciation trend.”

According to Zhitong Caijing, Shahab Jalinoos and other UBS strategists added that controlling inflation may rely more on fiscal measures, such as energy subsidies. In this case, the market might conclude that in a global stagflation environment, Japanese policymakers have no intention of preventing the yen’s depreciation, and the corresponding shocks could drive the USD/JPY significantly higher.

Disclaimer: The market carries risks; investments should be cautious. This article is generated by AI based on third-party data for reference only and does not constitute personal investment advice.