The yen’s recent trend really is interesting—by the end of May, it had already almost fully shaken off the intervention results from late April. The performance of the USD/JPY exchange rate over the past two weeks truly reflects the market’s extreme uncertainty about the Bank of Japan.

I’ve noticed that major institutions’ forecasts are now especially divergent. JPMorgan still maintains a relatively bearish stance. They believe the global monetary policy cycle is highly unfavorable for the yen, and that the policy combination of Saana Takaichi could further push inflation higher, so they stick to a USD/JPY target of 164 for Q4 2026. But Bank of America recently changed its tone—from bearish to neutral—and also cut its year-end forecast from 157 to 152.

The logic behind these differences is quite substantial. JPMorgan mainly focuses on long-term structural pressures, viewing official intervention as only a short-term constraining factor. Bank of America, meanwhile, has observed improvements in Japan’s structural capital flows. They list three possible conditions that could trigger a reversal: USD/JPY breaking above 160, prompting intervention; Japan’s 10-year government bond yield approaching 3% and thereby lifting real interest rates; or crude oil falling below $90 per barrel to improve Japan’s trade conditions.

Morgan Stanley’s wording is the most straightforward—USD/JPY is now an extreme two-way risk. The Bank of Japan’s June meeting has become the watershed event. Traders expect a 78% probability of rate hikes. If there is a hike and the global economy remains stable, USD/JPY could return to around 140; if not, it could drop straight to 170.

Honestly, this degree of divergence isn’t that common in the FX market. One side sees 152, the other sees 164, with an extreme scenario of 170 in between. Recently, on Gate as well, discussion around related FX products has heated up—this uncertainty really has attracted a lot of attention.