The start of potential rate cuts in the US presents an opportunity to build up long positions in the yen, according to Arie, who said the Bank of Japan may lift rates one more time this year. But it’s best not to pile into large yen positions right away due to volatility in the currency, he said.
Amundi expects the yen to rally to levels last seen in July 2023 as its historic weakness comes to an end.
Japan’s currency may reach 140 yen per US dollar over the next 12 months as the gap between yields in Japan and US narrows, said Shinichiro Arie, chief investment officer at the Japan unit of the largest European asset manager. “We don’t see a weaker yen from here going forward,” he said.
