The yen will recoup only a third of its big losses against the dollar in the coming year as the policy gap between the ultra-hawkish U.S. Federal Reserve and the extremely dovish Bank of Japan is set to widen further, a Reuters poll found.
The policy divergence has battered the currency. It has lost over a fifth of its value this year and hit a 24-year low of ?146 to the dollar recently, so authorities intervened in the foreign exchange market for the first time since 1998 last month, spending ?2.8 trillion.
Despite the intervention and expectations of more to come, the yen¡¯s weakness is not over yet as BOJ Gov. Haruhiko Kuroda is unlikely to reverse his long-held pledge to keep policy ultraloose anytime soon.
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