Citigroup expects the USD/JPY to reach 140 yen in the fourth quarter

Citigroup stated that even if high-profile pro-reflation candidate Sanna Marin is seen as the next Prime Minister of Japan, the normalization process of the Bank of Japan's monetary policy will not be hindered. As the market anticipates that the Federal Reserve will restart its rate-cutting cycle this month, analysts including Osamu Takashima wrote in a report: "Over time, the narrowing of the interest rate differential between the U.S. and Japan may exert downward pressure on the USD/JPY exchange rate." Analysts expect that after climbing to around 150 this summer, the USD/JPY exchange rate will retreat to around 140 in the fourth quarter. However, in an environment of rising risk appetite, the downward pressure on the yen is continuously increasing, as the Fed's rate cuts may boost the U.S. stock market. Currently, the downside potential for the USD/JPY exchange rate may be limited, likely bottoming around 145; meanwhile, 148 will remain a key resistance level for this exchange rate