BCA expects the yen and Japanese government bonds to remain under pressure through the end of 2026, though it said investors should prepare to begin buying the deeply undervalued currency this winter. Measures of inflation expectations and the relative steepness of Japan's yield curve provide a stronger explanation for recent moves in USD/JPY and EUR/JPY. Such an increase could eventually force the BoJ to adopt a more hawkish position, supporting the yen and flattening the Japanese yield curve. BCA recommended remaining underweight Japanese government bonds through year-end and beginning to accumulate yen during the winter. Related articlesWhy did the Japanese yen collapse in 2026?