Goldman Sachs Sees Yen Plummeting to 165 Per Dollar by Next Year

Goldman Sachs has revised its forecast for the Japanese yen's value against the US dollar, predicting it will fall to 165 per dollar within a year. This is part of a broader trend in which hedge funds' net short yen positions have reached their highest level since 2017.

The bank cited several factors contributing to the yen's weakness, including Japan's rising fiscal burden and persistently high US Treasury yields. Goldman Sachs strategist Karen Reichgott Fishman noted that the US-Japan interest-rate gap and other factors suggest further depreciation pressure is likely to persist.

The forecast for a weaker yen may put pressure on cryptocurrency liquidity due to prolonged U.S.-Japan interest rate differentials and a preference for dollar-denominated assets. However, Goldman Sachs also raised its forecasts for the dollar-yen rate to 162 in three months and 163 in six months.