What is Sumitomo Mitsui's outlook for the Japanese yen?

Sumitomo Mitsui predicts the yen may weaken to 180 against the dollar in the coming years.

When might the Nikkei 225 Stock Average reach 60,000?

The Nikkei 225 is expected to climb past 60,000 by the end of 2026.

Will Sumitomo Mitsui increase its Japanese government bond holdings?

Yes, Sumitomo Mitsui plans to aggressively rebuild and potentially double its Japanese government bond portfolio.

Home / Business and Economy / Yen May Hit 180 vs. Dollar, Nikkei Eyes 60,000

Yen May Hit 180 vs. Dollar, Nikkei Eyes 60,000

22 Jan

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Summary

Yen could reach 180 against the dollar within three years.
Nikkei 225 is predicted to surpass 60,000 by year-end.
Sumitomo Mitsui plans to double JGB holdings.

Yen May Hit 180 vs. Dollar, Nikkei Eyes 60,000

Arihiro Nagata, global markets head at Sumitomo Mitsui Financial Group, predicts a dramatic shift in Japanese financial markets. He forecasts the yen could weaken to 180 against the US dollar within the next three years. Concurrently, he anticipates the Nikkei 225 Stock Average will surge beyond 60,000 by the end of 2026, a substantial increase from current levels.

Nagata also indicated Sumitomo Mitsui's intention to aggressively rebuild its Japanese government bond (JGB) portfolio. The bank plans to potentially double its current ¥10.6 trillion ($67 billion) JGB holdings once current yield volatility subsides. This marks a significant pivot from prioritizing foreign bond investments.

The outlook for Japanese bonds remains cautious due to potential yield increases linked to fiscal policies. However, JGBs are expected to form the core of Sumitomo Mitsui Banking Corp.'s securities portfolio, which currently holds approximately ¥12 trillion in foreign notes. The average duration of its JGB holdings is a short 1.7 years.