Capital Economics: The Yen Is Expected to Rebound Next Year

```htmlGolden Ten Data reported on July 15 that John Higgins, an economist at Capital Economics, pointed out in a report that given the fundamentals remain favorable for the yen, the currency is expected to rebound before the end of next year. He stated that the current weakness of the yen is puzzling. According to data, the yield spread on five-year government bonds between the U.S. and Japan has changed, now favoring the yen. Previously, the real policy rate difference adjusted for inflation between the U.S. and Japan was significantly positive, but this gap has now disappeared. He also noted that although the rise in oil prices caused by the situation in Iran may further deteriorate Japan's trade conditions, from a net value perspective, Japan's trade conditions have improved in recent years. Capital Economics expects the USD/JPY exchange rate to drop to 150.00 by the end of 2027.```