Macquarie: The yen is expected to rise to 135 by the end of the year and break above 120 in two years.

Golden Ten Data on August 26, Macquarie strategists Gareth Berry and Thierry Wizman believe that the Federal Reserve’s recent interest rate cut signal will push the yen to rebound, and the yen will rise to 135 against the dollar by the end of the year. Fed Chair Powell’s speech in Jackson Hole “set the stage for a months-long rebound in the yen.” The Fed’s rate cut will weaken the Forex spreads earned by JPY SHORTS and encourage Japan investors to fill their FX hedging positions. In addition, strategists expect the yen to rise above 120 against the dollar within two years.