The Japanese yen is set to weaken modestly against the US dollar, its losses limited by an unsteady US recovery and loose monetary policy that are keeping the greenback under pressure, a Reuters poll showed.
The survey of 58 forex strategists, taken between May 2-5, saw the dollar at 82.0 yen in a month's time, 84.0 in three and 86.0 in six months. It is then seen rising to 90 yen in 12 months, a level last seen in June 2010.
A majority of the common contributors in the April and May polls forecast a stronger yen in the next 1-3 months but have left their 6-12 month call for a weaker yen unchanged.
The dollar hit a new seven-week low below 80 yen on Thursday, inching dangerously close to levels that prompted the Group of Seven rich nations (G7) to intervene in currency markets in March.
"In the near-term the yen is strengthening on the back of signs of economic slowdown in both the US and China," said Lee Hardman, currency economist at BTM-UFJ.
"That's resulting in a safe-haven bid for the yen and I think that dynamic could continue in the coming months."
The yen is expected to remain firm against the faltering greenback as bleak economic data coupled with the Federal Reserve's plans to keep rates low for an "extended period" maintains pressure on the dollar.
But Hardman said once the Fed completes the planned purchase of $600 billion in bonds in June - the second round of its quantitative easing (QE) programme - and begins to contemplate raising rates from near zero, the dollar will rise.
"When that scenario develops then USD/JPY will begin to drift modestly higher," he said. Mitul Kotecha, head of global FX strategy at CA-CIB, agrees.