Goldman Sachs
Global FX Strategy 2026
LIVE10 January 2026USD bearish
Back to CurrenciesBullish
USD/JPY
BOJ normalization drives yen recovery
GS Forecast Path
vs Prior ForecastCurrent target: 148Prior target: 145Revision: +2.1%
Cross-Firm Forecast Comparison
Key Drivers
BOJ rate normalization pace
Fed-BOJ rate convergence
Carry trade positioning
MoF intervention
Japanese institutional flows
All Firm Targets (Dec '26)
JPMBearish164.00
INGBullish152.00
BARCBullish149.00
GSBullish148.00
BofABullish147.00
MUFGBullish146.00
DBStrongly Bullish143.00
MSBullish140.00
Key Issues for 2026
1.BOJ rate path toward 0.75% is more aggressive than market pricing
2.Real yield convergence between Japan and US favors JPY
3.Carry trade unwind risk is asymmetric - fast when it happens
4.MoF intervention credibility remains intact despite market skepticism
5.Japanese institutional repatriation flows could accelerate
Risk Scenarios
Very bullish140-145
BOJ hikes to 1.0%, carry trades unwind aggressively, risk-off episode
Bullish - GS base case148
BOJ normalizes to 0.75%, Fed cuts 75bp, gradual carry unwind
Neutral152-155
BOJ hikes modestly, Fed on hold, carry trades persist
Bearish160-165
BOJ pauses, Fed hikes, carry trades rebuild aggressively
Analysis Summary
Bullish JPY as BOJ normalization continues with rate hikes toward 0.75% by year-end. Real yield convergence between Japan and US favors yen appreciation. Unlike JPM's bearish view, we see intervention credibility intact and carry trade unwind risks as asymmetric. Target 148 by year-end.