Forecast of the euro yen for 2014 and 2015 (table)

The and in has depreciated faster than expected and we expect this trend to continue over the next two years. In anticipation of yen 2014 and 2015 , we estimate that next year the crossing will move within the range 140/150 and 2015 we set up a range of 145/155 fluctuation . Since the beginning of 2013 until today, the depreciation of the yen has been -24% at its intersection against the euro and 18% against the dollar. This depreciation has driven Japanese bag the revaluation in 2013 reaches + 48%.

The Central Bank of Japan (BoJ for its acronym in English) will continue to receive pressure from the government to be very proactive with monetary measures to further depreciate the yen, which has become its main ally to boost economic growth. Moreover, we should not forget that the main objective of Abe is to end the burden of deflation and put the CPI + 2% in 2015. In a context in which the consumer will suffer the weight of the tax increase and in which the business sector has been slow to react, the depreciation of the Japanese currency is vital for its multiple effects on the economy:

– Increase the attractiveness of exports.

– Increases the benefits of exporting companies.

– Boosts the share price of their companies.

– Increased consumer confidence through the wealth effect.

All this creates a virtuous circle of production, income and growth very positive for consumption. Improving global economic context has a double depreciatory effect on the yen. On the one hand, the risk reduction makes assets “safe haven” appeal are losing at a faster pace. On the other, it causes a strong flow of funds from the liquidity injected by the BoJ, is directed toward assets denominated in other currencies. While the BoJ will continue to inject liquidity into the economy by an even unlimited time, the Fed has already begun the withdrawal of QE3, weakening the yen against the dollar. Although the Eurozone not live a reality as positive, include the strength shown by the euro, which has continued to appreciate against all currencies despite the interest rate cuts carried out by the ECB in November.

For all these reasons, our forecast for 2014 yen and 2015 is that the trend will be depreciatory facing the next two years . However, international opposition to this weakening could lead to the reappearance of a possible “currency war” (of which much talked about pricipios year), which could hamper to some extent the continuation of this trend (South Korea and Australia has recently commented on this issue).

Euro Yen forecast 2014 and 2015

Links of interest:

Report full financial forecasts 2014 and 2015

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CPI forecast Spain

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