Goldman Sachs: If the yen rises to 130 against the dollar, the Bank of Japan may consider stopping interest rate hikes

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ODAILY
04-14
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Planet Daily News: Goldman Sachs analysts stated that if the yen-to-dollar exchange rate rises to 130, the prospects for sustained inflation in Japan would become bleak, and the Bank of Japan might consider pausing interest rate hikes. Akira Otani and his team of Goldman Sachs economists wrote that a significant appreciation of the yen could squeeze profits of Japanese exporters, lower import prices, suppress domestic investment, and weaken wage growth, challenging the Bank of Japan's continued tightening policy. They also said that if the yen strengthens to around 130 against the dollar, the Bank of Japan might revise its inflation forecast for fiscal year 2026 to around 1.5%, below its 2% target. Conversely, if the yen falls below 160 - the level that triggered the Bank of Japan's interest rate hike last July - the Bank of Japan might consider further advancing or accelerating interest rate hikes. (Jin Shi)

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