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During 2020 the yen strengthened against the US dollar from 108.51 to 103.20. 

COVID-19 remains problematic in Japan and weaker growth will complicate the Bank of Japan’s efforts to lift inflation expectations while political uncertainty with an election this year will place further doubts on the longevity of ‘Abenomics’. Economists at MUFG Bank expects the USD/JPY to nosedive below the 100.00 mark in the coming months.

See – 

USD/JPY Price Forecast 2021: Dollar-yen to keep falling in the year of healing

Key quotes

“We expect the yen to strengthen by about 5% versus the US dollar this year, breaking below the 100-level for the first time since 2016 and to levels last recorded in 2013.” 

“COVID-19 infections picking up and Suga’s refusal to cancel the ‘Go-To-Travel’ policy (it was finally cancelled) encouraging travel that was blamed partly for the spread of covid has hit his popularity. PM Suga also breached COVID-19 rules himself by dining with celebrities. The cabinet approval fell to negative in December. With a general election required by October, his survival may be in doubt and increased political uncertainty would cloud the outlook and we believe help support the JPY.”

“A clear policy outlook that shows a strategy consistent with fighting deflation is required to diminish risks of real yields rising. Increased political uncertainty coupled with the collapse in global yields will ensure JPY strength certainly against the dollar and probably against some of the other core G10 currencies with very low yields.”