Goldman Sachs revises up forecast path for USD/JPY to reflect more persistent U.S. hiking cycle - Reuters
The desk anticipates a stronger USD/JPY trajectory, driven by an extended U.S. interest rate hiking cycle as highlighted by Goldman Sachs' revised forecasts. Per the full note, Goldman now expects the USD/JPY to reflect a more persistent tightening environment, which could support the dollar against the yen in the near term. This aligns with our view that the Fed's commitment to higher rates will continue to influence currency dynamics. The current consensus among firms suggests a target range for USD/JPY that reflects this bullish sentiment, particularly as market participants adjust their positions accordingly.
What the desk is arguing
Goldman Sachs has upgraded its USD/JPY forecasts, anticipating that the prolonged U.S. hiking cycle will keep the dollar buoyant against the yen. With current spot rates around 157.0000, the bank's projections indicate a path that suggests the USD will remain strong, driven by a more hawkish stance from the Fed amidst prevailing economic uncertainties.
Supporting this view, many analysts are adjusting their expectations for tighter U.S. monetary policy, particularly as inflation pressures remain persistent. The contrast with Japan's ongoing monetary accommodation adds further weight to this thesis, making it clear that the dollar may not only retain strength but could accelerate in its appreciation against the yen over coming months.
How firms align with this view
Aligned with the desk view
Contrary positioning
Key takeaways
- 01Goldman Sachs revises USD/JPY forecast upward, citing a persistent U.S. hiking cycle.
- 02Current spot is 157.0000, with Goldman targeting 155.0000 for Mar26.
- 03This revision diverges from a consensus target of 154.5000.
Market implications
The upward revision by Goldman Sachs suggests the potential for continued dollar strength relative to the yen, which could attract further dollar-buying interest in the market. As more firms reconsider their projections, particularly with respect to U.S. economic performance and inflation trajectories, traders may reassess their positions accordingly.
Risks to this view
One of the significant risks is if the Federal Reserve signals a pause or reversal in its rate hike cycle, which could swiftly erode dollar strength against the yen. Additionally, potential geopolitical tensions or shifts in monetary policy from the Bank of Japan may also introduce volatility into USD/JPY dynamics.
USD/JPY — All Desk Targets
| Firm | Stance | YE 2027 |
|---|---|---|
Goldman Sachs | Bearish | 165.00 |
UOB | Bearish | 163.00 |
Citi | Bearish | 163.00 |
Sources & References
How we cover this story
Cross-firm research
USD/JPY Consensus Check: Spot at 161.71, Median Target 149 — Week of July 11, 2026
USD/JPY trades at 161.71, some 8.53% above the 23-firm median Dec-26 target of 149.0, with a 25-point dispersion signalling deep disagreement on the BoJ path.
USD/JPY at 161.71: Consensus Targets 149.0 With a 25-Point Spread
USD/JPY trades 8.53% above the 23-firm Dec-2026 consensus of 149.0, with a 25-point dispersion that reflects sharply divergent BoJ and US rates assumptions.
USD/JPY Consensus Check: Spot at 161.71, Median Target 149.0 — Week of July 10, 2026
USD/JPY trades at 161.71, 8.53% above the 23-firm median Dec-26 target of 149.0, with a 25-point dispersion that reflects deep disagreement on the BoJ-Fed rate-spread path.