USD/JPY expected to trade 140 – 150 in 2025 according to most Japanese firms

Summarising the findings.

• Concerns About Trump Presidency:

  • Nearly 75% of Japanese companies expect Donald Trump’s next term as U.S. president to negatively impact the business environment.
  • Key concerns include planned tariff hikes and heightened U.S.-China trade tensions.

• Impact of Tariff Hikes:

  • Trump has threatened tariffs exceeding 60% on Chinese imports, with initial tariffs projected to range from 15% to 60%.
  • Additional threats include a 25% levy on goods from Canada and Mexico, where many Japanese automakers operate factories.
  • Two-thirds of firms indicate no planned changes to business strategy, while 22% would cut costs and 8% would expand in other markets.

• Earnings Outlook:

  • Half of Japanese companies expect higher earnings in the next fiscal year.
  • About 20% anticipate a decline, while the remainder foresee stable earnings.
  • Improved profits are attributed to rate hikes, stronger freight rates, and a tourism boom.

• Yen and Exchange Rate Expectations:

  • Approximately 60% of firms predict the dollar will trade between 140 yen and 150 yen in 2025.

• Bank of Japan Leadership:

  • Over half of respondents expressed confidence in BOJ Governor Kazuo Ueda’s ability to normalize monetary policy after ending negative interest rates in March.
  • The BOJ raised its short-term policy target to 0.25% in July, with expectations of another rate hike soon.

• Survey Details:

  • Conducted by Nikkei Research for Reuters between Nov. 27 and Dec. 6.
  • Survey included 505 companies, with 236 responses provided anonymously.

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The BoJ meet next week, on hold?

• USD/JPY sent for a spin but now moving higher as BOJ rate hike odds fade
• USD/JPY sent for a spin but now moving higher as BOJ rate hike odds fade

This article was written by Eamonn Sheridan at www.forexlive.com.