USD/JPY: The Yen weakness is here to stay – Goldman Sachs
|In the view of the Goldman Sachs Research Team, the balance of risks is in favor a weaker Japanese Yen over the coming weeks.
Key quotes
"The US nonfarm payrolls report drove US yields higher and equities lower, a negative mix for the Yen particularly in an environment where Japanese yields are fixed. Indeed, JPY underperformed most other major currencies on the day, pushing up USD/JPY towards our 3-month forecast of 132.”
"The combination of our baseline views for 2023 of no recession, higher US yields, and the continuation of YCC in slightly different form argues for a period of renewed Yen weakness, despite the balance of risks looking more favorable for the currency given greater BoJ flexibility.”
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