Goldman Sachs lowers USD/JPY 12-month forecast to 105.00

In the latest note, Goldman Sachs’ (GS) analysts revised up their forecasts on the Japanese currency, the JPY, over the coming months, implying that they see a lower USD/JPY ahead.

Key Points:

GS lowered USD/JPY 3-month forecast to 108 vs. the previous forecast at 112, 6-month forecast to 107 vs. 110 previous and the 12-month forecast to 105 vs. 108 previous.

They cited the following reasons for the downward revision:

US real rates are seen falling further.

JPY should be held as a portfolio hedge.

Less hawkish Fed.

The market expects slower US growth.

Chance of a US / China trade truce has improved.