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.