Goldman Sachs on USD/JPY:
- We are revising up our 3-month forecast to 123 (vs. 117 previously) to reflect continued weakness around current levels, with possible further USD/JPY upside in the very short term
- Over a longer horizon, we still think that the upside in USD/JPY is getting constrained as we get closer to historical intervention thresholds. Moreover, the Yen's deep undervaluation and its typical use as a recession hedge could make it an increasingly attractive buy for longer-term investors.
- Combined with our broad Dollar views, we still see reason to forecast Yen appreciation in the medium-term with USD/JPY at 120 in 6 months and 118 in 12 months (vs. 117 in 6 months and 115 in 12 months previously)
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