Goldman Sachs cites US growth outlook, BoJ bias to forecast USD/JPY rally to 155.00 in six months

Goldman Sachs (GS) strategist Kamakshya Trivedi flags fears of witnessing the USD/JPY pair’s rally towards the levels last seen in 1990 during its latest analytical piece, shared by Bloomberg.

The GS Analyst highlights the Bank of Japan’s (BoJ) hesitance in lifting the rates and the US growth outlook as the key catalysts to revise its six-month USD/JPY forecast to 155.00 from 135.00 prior.

Key quotes

As long as the BOJ remains far from hiking rates and equities stay reasonably well supported, the yen should continue to trend weaker.

The main risk to this forecast of more yen weakness over the next six months is that higher inflation and currency depreciation prove more unpopular and catalyze more forceful responses in the form of currency intervention or an earlier hawkish shift from the BOJ, or both.

USD/JPY retreats

The note fails to gain applause as the USD/JPY pair snaps a three-day winning streak while retreating from the highest level since November 2022 to 146.35 by the press time, down 0.10% intraday.

Also read: USD/JPY trades with modest losses around 146.35-30 area, just below YTD peak