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Hedge Funds Predict Yen Decline to 160 Against the Dollar by Year-End

Hedge funds are increasingly confident that the Japanese yen will depreciate to 160 per U.S. dollar by the end of this year. This forecast stems from shifts in monetary policies adopted by both the Federal Reserve and the Bank of Japan.

The recent decisions by these central banks regarding interest rates have created a more favorable environment for the U.S. dollar, prompting hedge funds to make strategic bets on the yen’s decline. As the Federal Reserve continues to tighten its monetary policy to combat inflation, the interest rate differential between the U.S. and Japan is expected to widen further, putting additional pressure on the yen.

In contrast, the Bank of Japan has maintained its ultra-loose monetary stance, which is contributing to the yen’s weakness. As global economic conditions evolve, investors are closely monitoring these central banks’ actions, anticipating that the yen will continue its downward trend.

With the potential for the yen to reach 160 against the dollar, hedge funds are positioning themselves to capitalize on these market movements. This anticipated decline underscores the ongoing volatility in currency markets and highlights the significant influence of central bank policies on exchange rates.

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Source: Original