In the view of the Goldman Sachs Research Team, the balance of risks is in favor a weaker Japanese Yen over the coming weeks.

Key quotes

"The US nonfarm payrolls report drove US yields higher and equities lower, a negative mix for the Yen particularly in an environment where Japanese yields are fixed. Indeed, JPY underperformed most other major currencies on the day, pushing up USD/JPY towards our 3-month forecast of 132.”

"The combination of our baseline views for 2023 of no recession, higher US yields, and the continuation of YCC in slightly different form argues for a period of renewed Yen weakness, despite the balance of risks looking more favorable for the currency given greater BoJ flexibility.”