Goldman Sachs has revised its one-year dollar-yen forecast to 165 from 155, citing wide interest-rate differentials and Japan's fiscal pressures. Strategist Karen Reichgott Fishman pointed to higher-for-longer U.S. Treasury yields and only gradual Bank of Japan rate hikes as factors that could keep depreciation pressure on the yen, even as Goldman estimates the currency is historically undervalued. The yen traded around 162.21 per dollar in Asia on Monday, near its weakest levels since 1986. Goldman also raised its shorter-term forecasts, now expecting dollar-yen at 162 in three months and 163 in six months, up from earlier projections of 160 and 158. Hedge funds have increased short yen bets to the highest since 2017, and options traders assign roughly a 76% chance that dollar-yen reaches 165 by next June.
Goldman Sachs Group IncGoldman Sachs issued a bullish dollar-yen forecast, which could boost its trading and advisory revenue.