June 07, 2022 - 11:30 AM 285 views
Goldman Sachs analysts assume that the bullish potential in the USD/JPY currency pair appears to be restricted, despite the threats of intervention by the Japanese officials to stem the Yen currency's downfall.
The data seems to be more buoyant over the last week, including topside shocks in the ISM manufacturing and nonfarm payrolls. If the trend keeps on going, it will probably dig the FOMC towards a 50 basis point (bps) rate hike in September. We assume that the USD/JPY pair has space to move moderately higher.
On the other hand, the extent of the topside is still observed to be restricted by official intervention threats, finally putting pressure on YCC, as domestic growth and inflation take off in 2022, along with greater global yields.
Therefore we carry on assuming that being a long Yen currency performs an alluring way to point that base-case outcome and keeping our USD/JPY pair recommendation options open.