UBS has adjusted its outlook for the U.S. dollar against the Japanese yen, raising near-term targets as higher global energy prices continue to reshape trade-flow dynamics between the two economies. The firm now projects USD/JPY will reach 155 in June 2026, up from its earlier call of 152, and has lifted its September 2026 target to 152 from 150.
While UBS raised those nearer-term estimates, the bank left its longer-dated forecasts unchanged. The firm continues to expect USD/JPY at 148 for December 2026 and 146 for March 2027.
UBS links the upward revision to sustained elevated oil prices and the asymmetry in energy trade exposure between the United States and Japan. In the bank's view, higher energy costs provide a relative tailwind to the U.S., a net energy exporter, while exerting pressure on Japan, which is a significant net energy importer. That divergence in energy trade positions is identified as an ongoing factor supporting the dollar-yen exchange rate.
The bank also expects global oil prices to remain elevated in the near term. UBS noted that the currency pair could reverse course and trend lower if the U.S.-Iran conflict subsides and global energy flows move back toward normal patterns. In other words, normalization of energy markets and a de-escalation of geopolitical tensions are seen as potential triggers for a weaker dollar versus the yen.
UBS specifically attributes the present support for the dollar-yen pair to the impact of higher energy costs on Japan's import bill relative to export gains realized by the United States. The bank's revised short-term projections reflect the current energy-driven trade balance differential between the two countries, while its unchanged longer-term forecasts suggest an expectation that these forces may moderate over time.
Context limitations: The bank's outlook ties movements in USD/JPY directly to elevated energy prices and to developments in the U.S.-Iran situation; further details beyond those linkages were not provided in the bank's projections.