Goldman Sachs maintained their forecast for USD/JPY at ¥108 level

Last week was marked by the meeting of the Bank of Japan, which had a huge number of conflicting views of economists and market participants about what exactly did the regulator and what this means for the Japanese economy and markets.
Bank analysts agree, that it is unlikely that the new policy to be more effective than the previous in terms of stimulating the economy. For this the market will need to convince on promises of Kuroda for inflation over 2%, while long-term incentive policy failed to reach 1 percent, analysts say.
At the same time they do not agree with the fact that the Bank of Japan will not use more stimulus, or that they will reduce them. On the contrary, in their opinion, change of the course of monetary policy speaks for determination of the regulator to face the situation and to ensure that incentives will finally reach the real economy.
Currently the trade in yen is complexed. According to estimates of analysts the yen is close to its long-term "fair" exchange rate against the dollar and it is therefore preferable for the currency to be sold against the dollar than against the euro. Along with the decline in inflation expectations in Japan compared with the United States, means that this year the yen is more attractive than the dollar.
Currency strategists at Goldman Sachs maintained three months forecast for USD/JPY at ¥108 level. It is based on the assumption that the FOMC will realize the need for higher nominal interest rates, together with rising inflationary pressures. This, together with the commitment of the Bank of Japan to achieve the target level of inflation, should lead to a change in yield in favor of the dollar.