Yen Bearish Voices Build for 2026 on Cautious BOJ Policy Path

The bearish chorus on the yen is growing louder after the Bank of Japan’s latest interest rate hike failed to deliver a sustained lift to the currency, reinforcing views that there’s no quick fix for its structural weakness.

Strategists at JPMorgan Chase & Co., BNP Paribas SA and other firms see the yen weakening to 160 per dollar or beyond by the end of 2026, driven by still-wide US-Japan yield gaps, negative real rates and persistent capital outflows. The trend will likely persist as long as the BOJ tightens only gradually and fiscal-driven inflation risks linger, they say.