Goldman Sachs Turns More Bearish on Yen, Sees 165 Per Dollar

Goldman Sachs expects the yen to weaken to 165 per greenback inside a yr, a extra bearish name than its earlier 155 forecast and among the many gloomiest on Wall Street.

The revised forecast comes amid the yen’s droop to its weakest stage towards the greenback since 1986, making it one in all 2026’s worst-performing main currencies.

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Why Goldman Sachs Turned Even More Bearish on the Yen

The financial institution additionally turned extra bearish over shorter horizons. It now sees the pair at 162 in three months and 163 in six months.

Those calls mark a revision from 160 and 158, respectively. Strategist Karen Reichgott Fishman named a number of forces working towards the forex.

These included the higher-for-longer US yields, a low threat of recession, Japanese fiscal stress, and gradual BoJ hikes.

Why Tokyo’s Defense of the Yen May Not Hold

Japan’s Ministry of Finance stays targeted on the currency market. Yet, Goldman expects any official intervention to have a brief impact.

“In reality, we see no cause for the upward development in USD/JPY to cease with out an sudden destructive US development shock or a BoJ pivot in the direction of extra aggressive coverage tightening,” Goldman added.

The positioning backs the bearish name. Hedge funds pushed bearish yen bets to the very best stage since 2017 final month.

In addition, merchants assign a few 72% likelihood that the pair will attain 165 by June 2027, in response to Bloomberg.

Goldman additionally expects the greenback to remain agency. It tied that view to the US synthetic intelligence (AI) funding growth and power provide strains.

The financial institution trimmed its euro forecasts whereas hanging a extra optimistic tone on the Indian rupee and Colombia’s peso.

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