Why could Japanese Yen outperform within G10 in 2024?

The Japanese Yen will likely rise significantly in value next year. The BoJ’s action could lead to a significant performance of the Yen.

Analysts anticipate that the BoJ will terminate NIRP and YCC at its meeting in January. Although this is partially priced, expectations of additional policy tightening later in 2024 are likely to be fueled by the BoJ’s tone.

Analysts predict that among the G10 currencies, the Yen has the best chance of performing well in 2019. The biggest impact on the JPY is the global inflation shock is reversing; even a partial reversal of the USD/JPY rise from 115.00 to 150.00 suggests significant room for improvement.

Given the robust upward advance and the appealing carry, short JPY positioning is still important, but there is a chance that the Yen will move much more sharply and strongly than we presently anticipate if expectations of a trend reversal continue to grow.