Goldman vs. Crédit Agricole: USD/JPY to Plummet or Rebound?
The US Dollar to Japanese Yen (USD/JPY) exchange rate has been on a wild ride, plummeting from above 160.00 to a low near 155.31 before recovering 0.38% during Friday's session.
This sharp weekly reversal has opened up a stark disagreement between Goldman Sachs and Crédit Agricole, with two vastly different predictions for the USD/JPY's future.
Goldman analyst sees the pair falling to 140-145 over the next 6-12 months, citing hawkish Bank of Japan comments, carry-trade liquidation, and speculation that Japan's GPIF could increase its domestic bond allocation.
The Goldman trader noted: 'If US data comes in softer, or the Fed isn't able to hike, and in combination with that, the BOJ come across more hawkish, I think you can see USDJPY continue to grind lower.'
On the other hand, Crédit Agricole forecasts a rebound to 163 by December, citing record levels of intervention as capping the USD/JPY's rally at 164.