Neutral impactEconomy
Why Goldman says the yen may not have much room to strengthen
CNBC-TV18 1d ago·21 Sept 2026, 10:14 am
Goldman Sachs has revised its outlook on the Japanese yen, suggesting it may not see significant gains in the near future. The bank prefers a strategy of going long against the euro rather than betting on a direct rise in the dollar-yen pair. This cautious stance is largely driven by the fact that Japanese investors currently hold a large portion of their foreign assets unhedged. For the yen to strengthen meaningfully, these investors would need to repatriate these funds, but analysts view this process as slow and gradual.
For investors, this implies that while the yen remains a potential hedge, it may not offer immediate returns. The market is currently focused on whether Japanese investors will start reducing their foreign exposure. Until there is a clear shift in their behavior, the currency is likely to remain range-bound. Traders should monitor any signals of increased repatriation, as that would be the primary catalyst for a sustained move in the currency.
Key takeaways
- Category: Economy.
- Assessed as a significant, market-relevant update.
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