Goldman Cuts Yen Forecast to 165 Per Dollar, Likes Carry Trades

Goldman Sachs forecasts the yen will weaken to 165 per dollar within a year, driven by interest rate differentials with the US. This trend supports carry trades but may signal trouble for global risk assets. As investors reassess positions amid shifting monetary policies, a weaker yen could potentially destabilize markets. The projection emphasizes the impact of Japan's monetary divergence from the US on currency valuation and the subsequent risks to international financial stability.