Analysts at Goldman Sachs offer a bullish outlook for USD/JPY, citing that there is more room to rise for the major in the near term.

Key quotes

"We are revising up our 3-month forecast to 123 (vs. 117 previously) to reflect continued weakness around current levels, with possible further USD/JPY upside in the very short term."

"Over a longer horizon, we still think that the upside in USD/JPY is getting constrained as we get closer to historical intervention thresholds.”

“Moreover, the Yen's deep undervaluation and its typical use as a recession hedge could make it an increasingly attractive buy for longer-term investors.”

“Combined with our broad Dollar views, we still see a reason to forecast Yen appreciation in the medium-term with USD/JPY at 120 in 6 months and 118 in 12 months.”