RBC Capital: The yen is unlikely to recover before next year

Golden Ten Data reported on June 25 that Abbas Keshvani, an analyst at RBC Capital Markets, stated in a report that the yen is unlikely to rebound before the Bank of Japan slows down its quantitative tightening pace next year. The quantitative tightening, planned to be slowed starting from April 2027, should stabilize Japanese government bonds. Japanese bonds offer yields higher than their FX-hedged alternatives. Therefore, if the Bank of Japan’s slowing of quantitative tightening leads to bond yields stabilizing and alleviates investor concerns about losses, local investors may be motivated to start shifting towards yen-denominated assets. RBC predicts that by the end of 2027, the USD/JPY will fall to 154.