Goldman Sachs experts said that the increase in US Treasury bond yields could offset the positive impact of expectations of changes in the parameters of the monetary policy of the Central Bank of Japan. Against this background, the Japanese yen is likely to continue to be under pressure in the short term, experts added.
"If the US economy continues to demonstrate stability and the probability of a more active tightening of the Fed's monetary policy increases, the yen, which earlier today updated the minimum of 2023 against the US dollar, may continue its decline," Goldman Sachs said.
"Real US interest rates are extremely important for the prospects of the yen. In general, the current situation does not indicate the possibility of a significant drop in the US dollar against the yen, even if the Bank of Japan decided to move to tightening monetary policy," experts said, adding that many traders expect the new head of the Bank of Japan to adjust policy parameters that could further strengthen the yen.
"Overall, such speculation, combined with heightened fears about a recession, should somewhat limit any decline in the yen," Goldman Sachs added.