The yen has depreciated significantly over the past three years as the divergence between tighter monetary policy in other advanced economies and the BoJ’s accommodative stance has widened. At this point, the yen is far weaker than our assessment of its fundamental “fair value”. With that policy divergence now finally coming to an end as the BoJ gradually normalises policy while other central banks shift towards easing, the yen is poised for a strong rebound over the next couple of years.