As noted earlier, USD/JPY above 115 for the first time since 2017

Goldman Sachs are not overly keen on further yen weakness though, preferring EUR as a funding option:

  • Higher inflation and upside risk to US rates into the end of the year, all else equal, imply further yen depreciation. However, the EUR may a better funding candidate over the short term for a few reasons"
  • First, both currencies tend to depreciate when the US yield curve bear flattens. Second, even though real GDP growth came in at -3.0% qoq annualized in the third quarter, well below market expectations, our economists forecast strong growth in 2021 Q4..Finally, if an increasingly hawkish Fed were to damage risky assets, the yen would outperform

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