Yen to reach 147 per dollar as interest rate gap narrows
Bloomberg's top dollar-yen forecaster Neil Parker expects the Japanese currency to rally next year due to Bank of Japan tightening.
Neil Parker, the top dollar-yen forecaster in Bloomberg’s latest rankings, predicts the Japanese yen will rally toward 147 per dollar next year, according to a report by Mint.
Parker, who is the head of economics and market strategy at TTT Moneycorp Limited, expects the yen to strengthen to around 155 by the end of this year before appreciating further.
The forecast is based on the narrowing interest-rate gap between Japan and the US. Parker expects the Bank of Japan to raise its benchmark rate from 1.25 per cent to at least 2 per cent, or potentially 2.25 per cent.
He anticipates the US Federal Reserve may raise interest rates once more in December before stopping at a range of around 4.00-4.25 per cent.
Parker said that Japan may prove to be an outlier by delivering on its promise to bring interest rates in line with inflation. He noted that a pickup in the consumer price index to 2.6 per cent or higher could prompt a stronger central bank response.
The yen has averaged around 158 per dollar this year and reached as low as 163.99 in July before authorities intervened.