Asia FX cautious amid US govt shutdown; yen tumbles after Takaichi’s LDP win
Investing.com - Morgan Stanley has identified a potential long-term strengthening trend for the Japanese yen, according to a research note released Tuesday.
The investment bank’s analysis, dated September 2, points to a recurring eight-to-nine-year cycle in the Japanese yen’s effective exchange rate (EER), suggesting that the currency’s underperformance against major currencies likely bottomed out in 2024.
Morgan Stanley analysts believe the high posted in July 2024 could represent a major top, indicating the market might see lower levels in coming years, similar to the trend observed during the 2015-2020 period.
For the short and medium term, Morgan Stanley describes price fluctuations forming a triangle pattern within the 140-153 range, with their scenario favoring a rally to the upper boundary in the 154-155 range.
The firm notes this rally outlook remains valid as long as the price stays above 145, according to their latest currency research.
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