Why the yen could strengthen rapidly against the dollar according to BCA Research
- Adam German
- Oct 10
- 1 min read
Appearing on CNBC’s Squawk Box Asia on October 8th, Garry Evans, Chief Strategist at BCA Research, presents a strong outlook for the world's reserve currency. Evans argues that the extended era of US dollar strength is over, forecasting a significant five-year bear market.
He outlines the core reasons why this dramatic currency shift could be led by the massively undervalued Japanese Yen.
Key Topics
Evans argues a major shift is underway: the world is entering a five-to-eight-year dollar bear market that reverses a decade-long trend, and he explains the crucial causes.
He contends the US dollar is dramatically overvalued against the Japanese yen, which is trading far outside its true purchasing power parity level of 90.
In his view, the era of US exceptionalism is fading fast as global trust in the dollar as a safe haven is disappearing due to wayward policies and a negative international investment position.
Evans explains why investment strategists should now depart from the "easy money" practice of putting all assets into the US market.
He also points out that the Yen is an attractive powerhouse, currently estimated to be undervalued by up to 45% against the dollar, setting up a massive potential rebound.
Evans predicts structural shifts in interest rates - the Bank of Japan raising rates while the Fed prepares to cut - are creating the perfect storm for a surging yen.
A US recession scenario could trigger a lightning-fast move that pushes the yen to 100 or stronger in the next couple of years.
Hear the specific policy risks and political appointments in Japan that Evans believes the market is currently overshooting, limiting the new Prime Minister's power to stop the Bank of Japan.
