Goldman Sachs is not looking for too much higher for the US dollar against the yen.
- "Looking ahead, given the relatively more aggressive policy expectations now priced across the G10, we see a higher bar for the USD/JPY rally to continue much further.
- On our models, if the market were to pull forward the Fed hiking cycle- akin to the recent shift in BoE pricing-it could push USD/JPY up to 116, but further upside would likely require a move higher in the market's view of the terminal rate
- For this reason, investors might consider expressing yen downside views in EUR/JPY instead, where our rates strategists see a case for a steeper 2s5s"
GS commentary comes via eFX:
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