Yen shows significant value as a recession hedge – Goldman Sachs

Dhwani Mehta FXStreet

Despite the yen closing in on a 24-year low vs. the US dollar, Goldman Sachs Group Inc. strategists still remain bullish on the Japanese currency.

Key quotes

“We see rising chances of a change in the policy mix in Japan -- in the form of FX intervention or a shift higher in the yield-curve control tolerance limit.”

“The scenario where yen depreciates on a trend basis due to uniquely weak domestic inflation seems a relatively low probability outcome.”

“A US recession could lead to a 15%-20% drop in the dollar-yen.”

USD/JPY attempts a rebound from 133.80, downside looks likely on improved risk appetite

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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