The diverging prospects for monetary policy in Japan and the US have resulted in a renewed weakening of the yen in recent weeks. With price pressures set to remain subdued, we think that the Bank of Japan will have to step up the pace of easing before too long, perhaps as early as October. The upshot is that the currency should continue to depreciate, which would lift the yen-value of exports and repatriated earnings from overseas subsidiaries. Our end-2016 forecast for the yen is 140 against the dollar, while we expect the Nikkei to climb to 23,000.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services