You could lose some or all your initial investment do not invest money that you cannot afford to lose. Before you decide to trade foreign exchange, carefully consider your investment objectives, experience level, and risk tolerance. Leverage creates additional risk and loss exposure. Economic calendar in Asia 23 June 2023 - Japan inflation data for Mayįoreign exchange trading carries a high level of risk that may not be suitable for all investors.They also expect an adjustment to the YCC by the BoJ in July and have revised their forecast for the USD/JPY to be skewed to the upside over the next 12 monthsįor a limited time, get a 7 day free trial, basic for $79 per month In summary, Goldman Sachs believes that the Japanese Yen will likely remain relatively weak against the US Dollar in the medium term. This, combined with the key risk of renewed Fed hawkishness on sticky inflation, skews their projections for the path of USD/JPY over the next 12 months to the upside. Their colleagues' recent upward revisions to the US terminal rate and the S&P 500 index imply more room for X/JPY upside, with the potential for USD/JPY to trade closer to 145 over the next month, rather than their current 3-month forecast of 140. Upward Revision to USD/JPY Forecast: Goldman Sachs has revised their forecast for the USD/JPY. Limited JPY Strength in the Medium-Term: Unless the BoJ becomes significantly more hawkish and puts rate hikes on the table, Goldman Sachs sees limited scope for JPY strength over the medium term, despite its attractive valuation and recent foreign equity inflows.Ĥ. This estimate is slightly higher than their previous one but still implies a smaller effect than what many expect.ģ. Potential Impact of a YCC Scrapping: If the Bank of Japan (BoJ) surprises the market by scrapping YCC rather than just tweaking it, Goldman Sachs expects that a 4-5% sell-off in the JPY would be a reasonable baseline.

This could appease any concerns in the Japanese administration.Ģ. Expectation of an Adjustment to YCC: Goldman Sachs economists expect an adjustment to the Yield Curve Control (YCC) in July.

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