Synopsis: Goldman Sachs forecasts a gradual but uneven climb for the USD/JPY, with Japan's potential market interventions and transient yield fluctuations playing a critical role in the currency pair's trajectory.

Key Points:

• Intervention Threat: The USD/JPY's rise may face hiccups due to the ongoing risk of Japan stepping into the FX market to curb excessive volatility.

• Yield Fluctuations: Short-term relief in U.S. yields might reduce some of the pair's upward momentum, influenced by recent softer U.S. data and a watchful Federal Reserve stance.

• Central Bank Stance: Without a more aggressive policy change from the Bank of Japan or the Federal Reserve, or a downturn in the U.S. economy, any major appreciation of the yen seems unlikely.

Conclusion: Goldman Sachs anticipates the USD/JPY to trend upwards, though investors should be prepared for potential disruptions along the way. The bank underlines the lack of significant yen strengthening in the absence of dramatic shifts in monetary policies or a U.S. economic recession.