Goldman Sachs Slashes Dollar-Yen Forecast to 150 Amid BOJ Rate Hikes

Goldman Sachs has significantly revised its dollar-yen forecast to 150 over the next 12 months, marking a substantial shift towards yen appreciation. The bank's strategist, Karen Reichgott Fishman, cited the accelerated pace of Bank of Japan rate hikes and the potential repatriation of Japanese capital as key drivers behind the revision.

The BOJ raised its policy rate by 0.25 percentage point to 1.25% at its September 18 meeting, signaling a possible increase in interest rates. Fishman noted that this shift is easing inflationary pressures and reducing downward pressure on the yen.

Goldman Sachs is not alone in revising its yen outlook, with Bank of America already adjusting its year-end dollar-yen forecast to 149. The trend among hedge funds suggests positioning for the yen to strengthen beyond 150 per dollar by year-end.