UBS Group strategists have lifted their dollar-yen forecasts, now seeing USD/JPY at 143 by the end of 2025 and 140 by the end of 2026, compared with 130 previously. The revision reflects rising political uncertainty in Japan, which UBS says has helped keep the Bank of Japan more dovish than markets once expected.While investors are still pricing in one more BoJ rate hike before January 2026, the yen has not fully benefited from tightening expectations. Strategists pointed to Japan’s strong equity market and lower volatility as additional drags on the currency. UBS said there is little sign of a coordinated move toward a stronger yen, such as a new Plaza Accord, and the pair is more likely to trade toward the lower end of a 140–150 range rather than break below it for long.On the U.S. side, the bank expects the dollar to remain weak as labor market softness pressures short-term Treasury yields lower. This article was written by Eamonn Sheridan at investinglive.com.