USD/JPY Forecast: Next Week, Coming Days and Long Term

USD/JPY forecast 2026: what the banks expect

Most banks expect USD/JPY to fall slowly. The Bloomberg consensus stood at 156 yen for the end of 2026 and 150.5 yen for the end of September 2027 in early October. That is how the Japanese bank MUFG quotes it in its currency outlook of 1 October 2026. MUFG itself expects 155 yen at the end of 2026 and 149 yen at the end of September 2027.

Forecasts revised from late September 2026, as reported up to 10 October 2026; MUFG from its own outlook, the others as reported by Exchange Rates UK and FXStreet (links in the text).

Some banks cut their targets at the end of September. According to Exchange Rates UK, Goldman Sachs names 150 yen in twelve months (report of 10 October 2026), and Crédit Agricole expects an average of 156 yen in the fourth quarter, pointing to possible shifts of capital (report of 2 October 2026). Rabobank sees 155 yen in three months (6 October 2026), according to FXStreet. MUFG bases its targets on changed rate expectations.

UBS is the main exception to the upside. According to Exchange Rates UK, the Swiss bank sees the dollar at 160 yen at the end of 2026 and slightly lower in 2027 (forecast of 29 September 2026). The range of forecasts is wide, and bank forecasts are third-party assessments, not a trading recommendation.

USD/JPY forecast 2027 and 2028: what the banks expect

For different points in 2027, the banks selected here name values from about 145 to 158 yen. UBS expects 158 yen for September 2027, Goldman Sachs 150 yen for about October 2027 and Crédit Agricole 150 yen for the fourth quarter of 2027. In July, Commerzbank saw a path towards 145 yen by the end of 2027, a forecast made before the Fed’s rate rise in September (FXStreet).

For 2028 we found only one documented forecast. According to Exchange Rates UK, the Australian bank Westpac names 146 yen for the end of 2028, as of 2 September 2026. Westpac assumed a Fed rate of 3.625 percent; the Fed has since raised its target range to 3.75 to 4.00 percent. It is a dated forecast value from a single bank, not a reliable prediction.

Karsten’s charts show the current situation, not a forecast for a particular year. On the yearly chart, the yearly highs of 1990, 2024 and 2025 all lie in the current price area and form a strong resistance cluster around 160 yen.

USD/JPY forecast 2030: what purchasing power parity says

Purchasing power parity is the exchange rate at which goods cost the same in two countries.

In the sources checked for this article we found no reliable bank forecast for 2030. There are valuation yardsticks. In its World Economic Outlook of October 2026, the International Monetary Fund puts purchasing power parity for Japan at 93.7 yen per international dollar in 2030, and at 94.1 for 2026. Compared with the 2026 value of 94.1, the yen is clearly undervalued at the current rate of just under 158.

No price target follows from this. Exchange rates can drift away from purchasing power parity for decades; it is an equilibrium value, not a timetable.

Why is the yen so weak?

The rate gap is the distance between the policy rates of two currency areas. The wider it is, the more attractive the higher-yielding currency becomes for investors.

The main reason for the yen’s weakness is the rate gap to the United States. The Bank of Japan raised its policy rate to 1.25 percent on 18 September, effective 24 September. The Fed raised its target range to 3.75 to 4.00 percent on 16 September, effective 17 September. The gap is therefore about 2.6 percentage points, using the midpoint of the Fed range.

The dollar’s rate lead favours carry trades and can weigh on the yen. Investors borrow in yen and invest the money at higher rates; that is the carry trade. How the yen reacted to the Bank of Japan’s rate steps is in our article on the BoJ rate decision; market expectations for the Fed can be followed with the CME FedWatch Tool.

Yen intervention: how Japan supports its currency

In a currency intervention the Japanese Ministry of Finance buys yen in the market and sells dollars for it, to support its own currency.

Japan intervened in two major rounds in 2026. Between 28 April and 27 May it spent 11.73 trillion yen; for the reporting period from 30 July to 26 August the Ministry of Finance reported another 15.40 trillion yen. On 31 July Japan bought yen together with the US Treasury. According to FXStreet, both rounds followed moves above 160 yen.

After that, Japan reported no further intervention, but it warned again. For 27 August to 28 September the ministry reported no intervention; there is no official monthly report yet for the period after that. On 15 October, Finance Minister Satsuki Katayama said, according to The Japan Times, that Japan was ready to step into the currency market again if needed.

For traders that means: interventions can cause sharp price jumps and slippage. Slippage means an order is filled at a different price than expected. Stop distance and position size should fit a predefined loss limit, and staying out of the trade is also an option.

How this forecast is made

The charts are my own, with FXCM price data, from the 4-hour to the yearly chart. Each shows the highs and lows of earlier years that matter for its horizon. How such levels work is explained in our guide to support and resistance. The charts were made with TradingView, and this page follows our editorial policy. For the dollar against the euro, see our EUR/USD forecast. The other safe-haven currency is covered in the USD/CHF forecast.

Conclusion: USD/JPY sideways below resistance around 159 yen

As an active trader since 1980, I see USD/JPY in a sideways phase below strong resistance. After the three-part correction from the 2026 high to the September low, the price recovered and tested the 2025 high at 158.87 twice. It has been moving sideways since 25 September.

In the short term, last week’s low at 157.54 decides. Below it, a sell signal would arise. To the upside, the first resistance is around 159 yen, and in the long term the resistance cluster around 160 yen from the yearly highs of 1990, 2024 and 2025.

Please note

The scenarios are a personal assessment based on experience. They summarize possible price developments for each time frame and are not a certainty. This is market analysis, not investment advice. Keep your position sizes in line with your own risk management.

This forecast is translated from the German edition on kagels-trading.de.

How our forecasts are made and reviewed: How we work.