06:57 AM EDT, 08/27/2025 (MT Newswires) -- UBS said it slightly raised its USD/JPY forecasts to 142 for December 2025 from 140, 140 for March 2026 versus 138, 138 for June 2026 from 136 and introduced a 136 target for September 2026.

The bank's forecasts reflect a slower pace of yen (JPY) appreciation, in view of a pro-risk global backdrop that favors yield-carry trades.

That said, the fundamental driver for a USD/JPY decline -- in other words, narrowing United States-Japan interest rate differentials -- remains in place, stated UBS.

Considering the USDJ/PY has deviated strongly from real yield

differentials, the bank sees 148-150 levels as toppish for the exchange rate, and favor selling USD/JPY upside risk for yield pickup.