Short USD/JPY: the best global recession hedge – Goldman Sachs

Dhwani Mehta FXStreet

Analysts at the US investment banking giant, Goldman Sachs, believe that buying Yen as a hedge against a global recession is the best bet. However, they do not see a global recession coming in the near-term.

Key Quotes:

“A global recession is likely to see falling US yields alongside falling US stocks.

USD/JPY the most likely pair to weaken.

US/yen falls during risk-off periods as investors move into the safe-haven yen.

BOJ yield curve control policy fixes nominal yields in Japan, thus a US yield fall makes a more favourable Japan / US differential.

Not expecting a global recession in the near term.

But do not expect a drop in activity ex-US.”

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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