(Bloomberg) -- Yen bulls have largely been in hiding recently, but one notable outlier is Macquarie Group Ltd.

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The yen may strengthen to around 120 per dollar — about a 33% jump from current levels — in 18 months or more, according to Gareth Berry, FX and rates strategist in Singapore. Much of this outcome will depend heavily on the Federal Reserve slashing interest rates to bolster demand in the event of a huge scare in the world’s biggest economy.

“The Fed would probably cut aggressively if the shock was global in nature,” Berry said in an interview. “As soon as the Fed starts cutting aggressively, dollar-yen would plunge.”

The ultra bullish call stands out among a chorus of bears forecasting 170 as the next big target amid a yawning interest-rate gap between the US and Japan. Berry’s forecast is also significantly more optimistic than the median Bloomberg analyst consensus for Japan’s currency to trade at around 140 by the end of 2025, and 138 by late 2026.

The currency changed hands around 159.84 per dollar in Asia Wednesday, nearing the 160.17 level set on April 29 when Japan is suspected to have made the first of two recent interventions in the FX market.

Investors are so heavily invested in betting on a weaker yen that it’d take very little for the currency to snap higher, according to Berry.

“We’re kind of playing the waiting game now — picking up the pennies in front of the steam roller,” Berry said. “If I were long dollar yen now I’d be sleeping with one eye open.”

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