HSBC lowers its US dollar and Japanese yen expectations, expecting the yen's safe-haven status to strengthen again.

On September 13, Jinshi data, HSBC strategists Joey Chew and Paul Mackel said that HSBC lowered its expectations for the US dollar against the Japanese yen, believing that the yen's safe-haven properties are re-strengthening and the Fed is preparing to start a rate cut cycle. The bank adjusted its forecast for the US dollar against the Japanese yen from the previous 148 to 142 in the fourth quarter, and from 144 to 138 in the second quarter of 2025. The strategists also said that as the Fed is no longer in a rate hike cycle, compared to the past three years, future safe-haven sentiment trends are more likely to benefit the yen. The yen is now positively correlated with the panic index VIX, and negatively correlated with the FTSE World Index and the yield of 10-year US Treasury bonds. The bank expects the Central Bank of Japan to raise the Interest Rate to 0.75% when the rate hike cycle ends, and to raise it by 25 basis points twice in the first and third quarters of 2025.