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2025-07-29 16:06:18
Goldman Sachs recommends shorting USD/JPY to bet on a Fed policy shift. (1) Goldman Sachs' latest report recommends buying USD/JPY put options, believing the current spot level of 148.30 is attractive. It recommends buying a one-week option with a strike price of 146.50 at a cost of 21 basis points. (2) The bank anticipates the Federal Reserve may signal a September rate cut, and coupled with potentially weak non-farm payroll data, the US dollar may face downward pressure. If the Bank of Japan maintains its hawkish stance, it will exacerbate monetary policy divergence. (3) Goldman Sachs notes that the options market is only pricing in a 50 basis point volatility expectation and believes the market is over-pricing political risks in Japan, with a low probability of Sanae Takaichi being elected as the leader of the Liberal Democratic Party.
