Goldman Sachs Sees Limited Room for Yen Strength

Goldman Sachs believes that the Japanese yen may not have much room to strengthen in value. The yen has rallied on expectations of a bigger policy shift in Japan, but Goldman prefers being long the yen against the euro rather than outright dollar-yen. This is due to a slower-moving portfolio shift by Japanese investors and a lack of clear near-term catalysts for yen appreciation.

According to Goldman Sachs, investors are not shifting their portfolios as quickly as expected, which is limiting the yen's potential for growth. The firm also notes that there are no clear near-term triggers for yen appreciation, making it difficult for the currency to strengthen further.