Goldman Sachs on USD/JPY Feb 25, 2015
Japan PPI services data were lower-than-expected earlier today. Public sector unions are calling for larger pay hikes and the latest indications from the BOJ show they may be reluctant to move further but Goldman Sachs thinks low inflation will eventually force their hand:
"The low inflation readings in Japan area major cause for concern for the BoJ and will likely see another round of easing in July or October," according to their Japan Chief Economist. He sees "something akin to the Fed's Operation Twist at those meetings, which should set the stage for the next sustained leg higher in USD/JPY," they say.
Goldman Sachs sees USD/JPY trading at 1.30 at year end.
Today the pair just touched at session high at 119.07 after falling as low as 118.63 in Asia.
