UBS adjusts USD/JPY outlook amid policy and trade shifts, Q3 forecast to 140 from 135 | Forexlive

UBS has revised its USD/JPY Q3 forecast higher to 140 from 135, citing continued dollar resilience and a cautious Bank of Japan policy backdrop. The bank notes that a test of the 200-day moving average near 150 cannot be ruled out in the near term, particularly if U.S. Treasury yields remain firm.

UBS also flags the potential for a U.S.-Japan trade deal to reinforce BoJ dovishness. Any agreement could introduce headwinds for Japan’s exporters, prompting the central bank to lean more accommodative in response.