In the latest note, Goldman Sachs’ (GS) analysts revised up their forecasts on the Japanese currency, the JPY, over the coming months, implying that they see a lower USD/JPY ahead.
GS lowered USD/JPY 3-month forecast to 108 vs. the previous forecast at 112, 6-month forecast to 107 vs. 110 previous and the 12-month forecast to 105 vs. 108 previous.
They cited the following reasons for the downward revision:
US real rates are seen falling further.
JPY should be held as a portfolio hedge.
Less hawkish Fed.
The market expects slower US growth.
Chance of a US / China trade truce has improved.
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