Goldman Sachs published a report sharply revising its 12-month dollar-yen forecast to ¥150. It expects a shift toward yen appreciation, driven by faster Bank of Japan rate hikes and expectations of Japanese funds returning home. The firm also lowered its forecasts for 3 months and 6 months to ¥158 and ¥155, respectively.
Goldman Sachs sharply revised its 12-month dollar-yen forecast to ¥150. This incorporates expectations of a faster pace of Bank of Japan rate hikes and the repatriation of Japanese funds held overseas.
According to the report, the 3-month forecast was lowered to ¥158 and the 6-month forecast to ¥155. A lower dollar-yen level indicates yen appreciation.
At its September meeting, the Bank of Japan raised the policy rate by 0.25 percentage points and set it at 1.25%. An acceleration in the pace of rate hikes was cited as a factor supporting further yen appreciation.
Yen buying advanced in the market, and the dollar-yen rate briefly rose to ¥158.28 in trading on the 25th. Other banks are also taking a more bullish view of the yen, with Bank of America (BoA) revising its year-end forecast to ¥149.
Goldman Sachs indicated that, rather than directly betting on yen appreciation in the short term, it intends to pursue a strategy targeting yen appreciation against the euro.