The FX market's bellwether for risk sentiment, AUD/JPY, is expected by NAB at ¥78 at the end of 2020.
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Australian dollar to Japanese Yen bank forecasts
National Australia Bank (NAB) are predicting the AUD/JPY rate to rise to ¥78 by the end of 2020.
The Japanese yen was the best performer within the major currencies in September. Despite radical monetary policy, the Bank of Japan now projects that it won’t accomplish its 2% inflation target at least until March 2022. The BoJ will hold a monetary policy meeting on October 28. Any announcements on interest rates and monetary policy could impact the value of the yen. Typically, JPY will gain when stock markets depreciate. Further correction of the equity markets from all-time highs, and safe haven demand driven by uncertainty, could put the currency in good stead to continue its upward trend. October Update
Goldman Sachs and RBC Capital forecast a large drop for US dollar against Japanese Yen to continue with a USD/JPY rate of 95 in the near future.
AUDJPY at 74.75 is 1.6% below its 90-DAY average, range 74.18-78.12.
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Forecasts and predictions for the AUD/JPY exchange rate change all the time, affected by news events and relative sentiment towards the Australian and Japanese economies. This continually updated article reviews AUD to JPY bank forecasts and recent trends for both currencies.
What is a good AUD to JPY exchange rate?
This is a difficult question and the answer really depends on many factors. The best way to consider an exchange rate's relative value is to look at the rate's history.
The following table looks at the change in the AUD to JPY exchange rate to the present day for periods going back upto 10 years:
AUD/JPY 10 year historic rates & change to 23-Oct-2020 : 74.7825
Australian Dollar in the Markets
The bleak outlook in the US has added downward pressure on the world’s base currency and helped consolidate the Aussie dollars’ upturn. Although the Australian dollar has recently edged through the key 0.72 handle, a sustained move above this level has been hard to come by.
Further uncertainty in the US could push the AUD through 0.72 US cents.
In the second quarter of 2020 AUD staged a rapid recovery through the months of April, May and into June up 25% from its mid-March lows to US70c in early June. This is due more to the perceived benefits to Australia of an awakening post-pandemic Chinese economy than the political-social situtation in the US dpressing the USD.
The Aussie had been savaged in March sliding to US55 cents the lowest since 2003. Growing fears of the coronavirus outbreak moved the market into safer currencies such as the USD and away from AUD, NZD and CAD.
The virus was a double blow to the Aussie after the earlier threat of proxy war between the US and Iran in Iraq had also pared back some of the gains the Aussie had made coming into the New Year.
The Australian dollar had started the new decade strongly climbing to multi-month highs helped along by cooling trade tensions between the United States and China and optimism for global economic growth in the year ahead.
The Aussie broke back over US70 cents on the final day of 2019 — a level not seen since mid year. During December the Australian dollar reversed direction (again) and climbed steadily back up against the US dollar on the back of the strength of the housing market and a market perception that further interest rate cuts were less likely.
Japanese Yen in the Markets
The Japanese yen has held gains, since December 2019 it has increased over 2% against G10 majors. If we continue to see second waves in infections, safe haven demand for the yen could increase, especially as the US’s COVID-19 recovery is drawn out and outlook for the USD is negative, at least until the elections.