The direction of the USD/JPY currency pair is expected to remain largely unchanged despite this week’s important events in Japan. These include the Bank of Japan‘s (BoJ) meeting and the Ministry of Finance’s (MoF) intervention data release, according to Goldman Sachs.
The USD/JPY recently crossed the 150 level, a significant milestone that has caught the attention of market participants around the world. The future direction of the Japanese Yen (JPY) will be determined by how these participants view developments following this week’s events.
Goldman Sachs predicts that the BoJ will maintain its current policy. This comes amid media speculation of a possible increase in the interest rate ceiling above 1%. The bank may adjust its core CPI for fiscal 2023 and 2024 in response to these speculations.
However, regardless of potential policy changes or an abrupt end to Yield Curve Control (YCC), Goldman Sachs believes that major shifts in the USD/JPY trajectory are unlikely. The firm’s forecast suggests that while these developments may affect the JPY, they are unlikely to result in a drastic change in its direction against the US Dollar (USD).
Market participants will be closely monitoring these events and their potential impact on the JPY’s future direction. The outcome of these developments could provide valuable insight into Japan’s economic outlook and its impact on global currency markets.
