Goldman Sachs has weighed in on the recent speculation about potential currency intervention by the Bank of Japan (BoJ) to stem the Yen's depreciation. According to the investment bank, the likelihood of such intervention at current levels is low. The reasons are as follows:

1. Comparatively Small Depreciation: Although the year-over-year comparison looks more negative for the Yen, the aggregate move has still been relatively small, especially when compared to the 20-30% sell-off leading up to the initial 2022 interventions. In other words, the depreciation has not yet reached alarming levels that might prompt intervention.

2. BoJ's Policy Adjustment on JGB Yields: The BoJ's recent policy tweak has allowed for higher levels of Japanese Government Bond (JGB) yields. This directly impacts the currency, and the long-term effectiveness of FX intervention often relies on this signaling channel. Through this channel, the market reshapes its expectations for future monetary policy, and the BoJ's new stance reduces the pressure for direct intervention.

Summary: Goldman Sachs sees the risk of immediate intervention by the BoJ in the FX market as low, mainly due to the moderate scale of the Yen's depreciation and the recent policy adjustments regarding JGB yields. These factors seem to align the market with the BoJ's views, reducing the urgency for more drastic measures.