Bloomberg (gated) have the info from Goldman Sachs. In brief:
- Goldman Sachs expects the Japanese yen to rise to the low 140s against the U.S. dollar this year
- Says its a prime hedge against growing concerns over U.S. economic weakness and trade tensions
- Says yen tends to perform well when U.S. equities and real yields fall together
- “The yen has room to appreciate in this less benign scenario where we and the market are increasing the probability of recession”
- “If the US labor market data surprises on the weak side... the yen is a very good hedge.”
Goldman recently revised its U.S. outlook to include three Fed rate cuts, citing the likely economic drag from President Trump’s expected tariffs.
