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Goldman Sachs: USDJPY at 60 ¥ in case of a new crisis
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Loading...Following the strong rally of the early-stage stocks, the fears of a recession faded, and recessive trading strategies were no longer on the agenda. However, this is not an obstacle for analysts at Goldman Sachs Group Inc. to prepare scenarios for such situations ...
"From a macro point of view, in my view, USDJPY will be the first indicator of a recession ... and I keep asking the question: What will happen if the FED decides to return the interest rate back to 0%?" says Bernhard Rzymelka, Head of rates-market at Goldman for Europe.
The chart is shown last time when the FED decided to stimulate the economy ... if this is repeated, it will be a new record low.
The yen grew year on year in Japan as the Lehman shock at the end of 2008 reaching a critical level of 75.35 ¥ in October 2008. after 2 QE and declaring 0% interest on deposits.
Due to low returns, most major Japanese investment banks have huge exposures in US bonds and assets. Japan Post Bank Co. and Norinchukin Bank own hundreds of billions of foreign assets according to a report by Michael Makdad analyst in Tokyo
"This time we will see levels of 60 ¥ due to the newly established dependence of the Japanese financial system on the leveraged base, and if the FED decides to discontinue QE, the path down is open and the stress on BOJ will be stronger than expected. says Rzymelka.
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