Morgan Stanley: The Japanese yen still has ample room to depreciate, with the fair value model pointing to 167.

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智通财经2026/08/24 13:56

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Morgan Stanley analysts pointed out in a report that unless there is a substantial shift in the US fundamental environment, the Japanese yen still has ample room for further depreciation against the US dollar.
Ongoing tensions in the Middle East and the resulting rise in energy prices will keep market expectations of the Federal Reserve's terminal rate at a high level, while further deteriorating Japan's trade conditions.
The bank's USD/JPY fair value model, which is based on US terminal rate pricing, global risk sentiment, and Japan's trade conditions, still points to a level of around 167.00.
In terms of market sentiment, the climbing energy import costs combined with the widening US-Japan interest rate gap mean that the structural pressure faced by the yen in the short term is difficult to alleviate.
The focus going forward will be the direction of the situation in the Middle East and potential changes in the Federal Reserve's policy path. Only if these factors see a turnaround might the yen's depreciation trend experience a temporary correction.

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Morgan Stanley: The Japanese yen still has ample room to depreciate, with the fair value model pointing to 167.

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