Fitch Ratings: The Japanese Yen has room for appreciation.

Fitch Ratings stated in its December global economic outlook that with the Bank of Japan expected to advance its monetary policy normalization stance, there is some potential for the Japanese yen to appreciate. The agency noted that 160 yen remains an important threshold for the US dollar against the yen, and pointed out that recent weakness in the yen has prompted the Japanese Ministry of Finance to issue verbal warnings. Fitch stated that the Bank of Japan may raise interest rates again by the end of 2025, but this move could be delayed until January. "Given the environment of re-inflation and yen weakness, we believe that policy rates will reach 1.5% by the end of 2026, but Prime Minister Naoimi Takashi's preference for loose policies leans towards reducing the number of rate hikes," the agency said. Data from the London Stock Exchange Group shows that the US dollar against the yen is currently at 155.34 yen.