According to Morgan Stanley and JPMorgan Chase, the Japanese yen will become the leading currency in 2016. It can appreciate higher than other major currencies.
Experts noted that Japan’s GDP growth can be boosted by structural reforms and an increase in public spending. At present, the Bank of Japan cannot lower the yen’s exchange rate by means of monetary stimulus because of a rising current account surplus.
Morgan Stanley forecasts that the Japanese currency will advance to 115 yen for one US dollar by the end of 2016. JP Morgan Chase anticipates a bullish trend for the yen up to 110 yen for one US dollar by the end of next year.
Over the last four years, the yen dropped by 40% against the US dollar. However, this year, the Japanese currency declined only by 3% compared to a 36% slump in the previous three years.
At the same time, analysts at Goldman Sachs upwardly revised their pessimistic forecasts for the euro. Now, they expect that the European currency will trade at the levels of $1.07, $1.05, and $1 in next three, six, and twelve months respectively.
Earlier, the bank said that the euro will reach parity with the US dollar as early as the end of 2015. However, analysts at Goldman Sachs admitted their great mistake about the forecasts for the latest ECB meeting, when the ECB’s additional stimulus measures did not meet expectations of most market participants.
