The most accurate analysts predict that the yen will depreciate to as low as 170 against the U.S. dollar next year
In Bloomberg's latest ranking, the analyst with the most accurate forecast of the U.S. dollar-yen exchange rate believes that the yen-dollar exchange rate will fall to a minimum of 170 next year. His predictive model pays little attention to the news and relies mainly on technical analysis. Vikram Murarka, founder and chief currency strategist of Kshitij Consultancy Services, makes predictions about the yen from his office in Kolkata, India, thousands of miles away from Tokyo. But in a Bloomberg survey last quarter, he was the most accurate in forecasting the dollar-yen exchange rate, and was one of the few analysts who had predicted the exchange rate would fall below 160. The strategist said one of his strengths is focusing on market signals rather than every piece of news released by Japan's Ministry of Finance or the Prime Minister's Office. The screen on his desk is covered with charts, tracking the Nikkei 225 and Variables such as the ratio of the index, short-term interest rate spreads, and the exchange rate of RMB against the Japanese yen. “We don’t pay much attention to the news,” said Murarka, who used a similar approach to forecast the euro-dollar exchange rate, the second-highest number. He said that any factor we track should be reflected in the price chart.