Why Morgan Stanley and MUFG back JPY?

Morgan Stanley and MUFG both see the Japanese yen as the strongest G10 currency in 2025. They expect it to gain value as U.S. interest rates fall and Japan’s central bank raises its own.

On the daily chart, USD/JPY oscillators are still away from being in the oversold zone, suggesting that the path of least resistance could to the downside.

MUFG predicts further yen gains, especially against the euro, and has set a target of 150 for EUR/JPY, down from 157.

Morgan Stanley also favors the Australian dollar. Meanwhile they believe the New Zealand dollar will appreciate but underperform the Australian dollar due to a weaker domestic outlook.