(Bloomberg) -- The yen is set to surge against the greenback in the months ahead in part as the Bank of Japan looks poised to adjust its policy of yield-curve control amid positive economic data, according to UBS Global Wealth Management.

Japan’s currency will strengthen to 122 per dollar by year-end, or about 15% from current levels, strategists including Solita Marcelli and Mark Haefele wrote in a report Friday. The yen reached 140.71 on Friday, the weakest since November.

Policymakers in Japan will raise the yield target for 10-year government bonds by at least 25 basis points to 0.75% sometime from July to October, UBS expects. The firm cited stronger-than-expected economic growth and a rising rate of core consumer inflation as triggers. Meanwhile, it said the latest Federal Reserve meeting minutes show the need for further US hikes has become less certain.

“While we acknowledge the risk of further near-term upside for the dollar, we believe the recent movement in USD/JPY is set to reverse,” the strategists said. “We retain our least-preferred rating on the greenback and most-preferred view on the yen.”

For the moment, traders are betting the Fed will raise rates again as soon as next month after hot inflation data. The yen is the second-worst performer against the dollar among Group-of-10 peers this year, slumping more than 6%. 

In addition to long yen exposure, UBS recommends selling “downside in AUD/USD amid light positioning” and said they see upside in the euro, sterling and Swiss franc against the dollar.

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