Goldman Sachs, HSBC, and SocGen see further yen weakness

Goldman Sachs, HSBC, and Societe Generale forecast further yen weakness and sustained US dollar strength. Bitcoin rallies as yen-driven carry trades and Japan’s fiscal pressures persist.

Goldman Sachs has updated its USD/JPY forecast, now predicting the yen will weaken to 165 per dollar within a year, up from its previous target of 155. This revision is driven by persistent US yield advantages, Japan’s fiscal challenges, and a strong dollar environment. HSBC strategists also expect the US dollar to remain strong against the yen until at least mid-2027, citing wide interest rate differentials and selective intervention by Japanese authorities. Societe Generale analysts project that the dollar’s strength will persist through the second half of 2026, supported by robust US growth expectations. Meanwhile, Bitcoin has rebounded above $63,000. Analysts suggest that further yen weakness could fuel additional rallies, especially as carry trades increase. The yen’s multi-decade lows are attributed to gradual Bank of Japan rate hikes, high US Treasury yields, and concerns over Japan’s fiscal spending and government borrowing.