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2026-02-16 07:58:39
Goldman Sachs Warns: Yen Rebound "Too Strong, Too Fast," BOJ Policy Risks Key. Goldman Sachs, in a report led by strategists including Kamakshya Trivedi, points out that the yen's recent rally may have been "too strong, too fast," influenced by BOJ policy risks. The report states that while the yen's upward momentum may continue in the coming weeks, if the BOJ continues its gradual interest rate hike path, leveraging the yen's current strength, the yen may return to a depreciation trend, and the long-term government bond yield curve may fluctuate. Strategists believe the likelihood of a large-scale capital outflow from Japan in the short term remains low, as portfolio data suggests that a narrower interest rate differential or a steeper Japanese government bond yield curve would be needed to trigger such flows. Furthermore, the dollar is continuing to weaken due to the combined pressures of US policy instability, the weakening effect of a sell-off in technology and software stocks on US equities, and the unique situation in Asia. For investors focused on dollar valuations, the current overvaluation of the dollar stems entirely from the relative performance of Asian currencies.
