Bank of America forecasts 6% yen rally by year-end

The US lender’s bullish outlook on the Japanese currency signals a potential shift in FX sentiment, challenging the yen’s recent weakness against the dollar.

By Handelsavisen Newsroom · Automated 6 August 2026, 03:19 UTC · 1 min read

Bank of America has issued a forecast predicting the Japanese yen will appreciate by 6% against the US dollar by the end of 2026.

The projection, reported by The Japan Times and the Australian Financial Review, marks a notable shift in sentiment for the currency, which has faced persistent pressure from the interest rate differential between the US and Japan.

The bank’s outlook suggests that traders should prepare for a potential reversal in the yen’s trajectory.

While the currency has been one of the weakest in the G10 over recent months, Bank of America’s analysis implies that market dynamics are shifting, possibly due to expectations of monetary policy adjustments or narrowing yield spreads.

This forecast comes as the Bank of Japan continues to monitor inflation risks and economic growth.

Sources indicate the central bank is expected to upgrade its economic growth forecast for fiscal 2026 while maintaining a cautious stance on policy normalization.