By eFXdata — Sep 24 - 08:40 AM
Synopsis:
Goldman Sachs revises its USD/JPY targets in light of the Fed's cutting cycle and the Bank of Japan's (BoJ) stance. They anticipate a gradual strengthening of the yen, albeit slower than market consensus.
Key Points:
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Milestone of Fed's Cutting Cycle:
- The initiation of the Fed’s cutting cycle is a significant development, signaling potential for USD/JPY to retest recent lows.
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Yen Strength Outlook:
- While gradual yen strength is expected, Goldman Sachs suggests that the pace will be slower than anticipated due to ongoing economic expansion in the US and the BoJ's objectives to maintain positive inflation.
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Revised Targets:
- The new USD/JPY targets are set at:
- 148 in 3 months
- 145 in 6 months
- 140 in 12 months
- This is a shift from previous targets of 155, 150, and 150.
- The new USD/JPY targets are set at:
Conclusion:
Goldman Sachs expects a slow but steady appreciation of the yen against the dollar, adjusting their USD/JPY forecasts to reflect the interplay between Fed easing and BoJ policies. The outlook suggests a cautious approach to yen strength, emphasizing economic conditions in the US and the BoJ's inflation goals.
Source:
Goldman Sachs Research/Market Commentary