Zhao Yaoting, Global Market Strategist for Pacific ex Japan at Invesco, expressed his views on the outlook for the Japanese yen, mentioning that the yen has been the worst-performing major developed market currency this year, falling nearly 7% against the US dollar. Despite the Bank of Japan ending its negative interest rate policy, yield curve control, and other unconventional policy tools, the results have remained the same. The dovish statements from the Bank of Japan, along with its continued purchases of Japanese government bonds, may mean the yen will continue to hover at its current levels. Additionally, the Federal Reserve's rate cuts this year may be limited. A stronger US economic growth environment typically indicates a stronger dollar and weaker yen. This trend may continue to put pressure on the yen, but if the yen falls to the level of 155 against the US dollar, the Japanese Ministry of Finance may intervene. Zhao Yaoting predicts that the Bank of Japan may raise rates again in June or July sooner than the market expects, which could alleviate some pressure on the yen. Recent Tankan surveys show that business conditions are robust, and long-term inflation expectations remain above 2%. Given Japan's long-standing stagnation, Zhao Yaoting sees this as a very positive sign. However, the Bank of Japan may continue to maintain a cautious stance on tightening monetary policy, especially considering that household consumption remains fragile. In the long run, structural factors are expected to provide some support for the yen. Japan maintains a significant current account surplus. In terms of purchasing power parity, the yen is undervalued, and its exchange rate against a basket of trade-weighted currencies has fallen to near historic lows. As the Bank of Japan has ended its quantitative easing policy, long-term bond yields in Japan may moderately rise in the coming quarters, which could prompt the Bank of Japan to purchase more Japanese government bonds, essentially restarting quantitative easing. Zhao Yaoting expects that by the end of 2024, the yield on 10-year Japanese government bonds will rise from the current 0.717% to around 1%.