Goldman Sachs Shifts Stance on Japanese Yen to Bullish Bias
Goldman Sachs has shifted its stance on the Japanese Yen (JPY), now seeing it as an attractive investment opportunity. The bank's research team notes that domestic policies in Japan are becoming more constructive, reducing pressure on the currency. This change in policy direction is expected to limit the upside in USD/JPY and increase the attractiveness of being long JPY.
In addition to the improving domestic environment, Goldman Sachs also cites the risk of additional interventions by central banks as a factor that could keep the upside in USD/JPY limited. The bank's research team notes that this increases the downside asymmetry in USD/JPY and makes the Yen's attractiveness as a portfolio hedge more compelling.
The shift in Goldman Sachs' stance on the JPY is particularly significant given its potential to mitigate recession fears. As the bank's research team notes, being long JPY could provide protection against an onset of recession fears.