The Japanese yen is set to gradually depreciate in 2011 as fears of central bank intervention weigh on sentiment but persistent risk aversion prevents a sharp fall in the perceived safe haven asset. The monthly survey of 55 strategists, taken between Dec. 30 and January 5, saw the dollar at 82.5 yen a month from now, 86.0 in six months and 89.0 in a year.
This compared with 83.6, 85.0 and 89.9 respectively in the previous month's survey. The dollar closed at 81.15 yen on Dec. 31, the last trading day of 2010 and on Wednesday was trading around 82.1.
Median forecasts for dollar/yen stayed below the 90 mark over all time horizons for the third month running, but they were not as low as the 81, 85 and 88 forecasts over one-month, six- and 12-months made in the November survey.
"With many of the government emergency programmes launched during these difficult times about to run out, 2011 will now give us a first true assessment of the sustainability of the modest recoveries witnessed in many parts of the world throughout 2010," said Dorothea Huttanus, head of foreign exchange and money markets at DZ Bank. Huttanus was the most accurate forecaster in 2010, viewing the yen would rise as the safest haven currency on elevated risk aversion.
The Japanese currency surged nearly 13 percent against the dollar in 2010, past levels not seen in 15 years, as long-term US interest rates fell and markets feared a sluggish recovery in the world's largest economy was running out of steam.