Goldman Sachs turns bullish on the yen: 12-month target raised to 150

(1) Goldman Sachs Group expects the yen to rise to the 150 mark within the next 12 months, shifting from its previous bearish stance. The institution believes that changes in domestic policies in Japan and potential capital repatriation will enhance the outlook for a stronger yen. (2) Goldman Sachs strategist Karen Reichgott Fishman raised the yen forecast for the next 12 months from the previous 165 yen to 1 US dollar to 150 yen to 1 US dollar in a report and adjusted the 3-month and 6-month targets to 158 and 155, respectively. (3) She stated that the forecast adjustment is mainly based on the Bank of Japan's interest rate hikes occurring faster than previously expected, as well as an increased possibility of domestic funds returning to Japanese assets. (4) Fishman wrote: “These changes collectively improve the attractiveness of going long on the yen, especially when the market starts to worry about the risk of economic recession, as the yen can provide some level of protection.”