USD/JPY: Yen undervalued, 12-month target at 103 – Goldman Sachs

In the view of the analysts at Goldman Sachs, the Japanese Yen remains undervalued, in light of the Bank of Japan’s (BOJ) monetary policy outlook and trade disputes.

Key Quotes:

“Positive news out of the US-China meeting could weigh on yen in the near term.

But its role as a portfolio hedge bodes will continue.

USD/JPY: Downside risks, 12-month target at 103.

Proprietary models set 95 as fair value.

Bullish Yen view supported by BOJ having limited monetary policy space to ease further.

Net outflows from Japan have shifted to "cross-border direct investment from portfolio flows, and outbound foreign direct investment could pull back on global trade uncertainty".

Trade disputes and unsettled global markets may lead to a choppy USD.“