Goldman Sachs sees yen longs as the best hedge against US recession and tariff risks

Bloomberg (gated) have the info from Goldman Sachs. In brief:

• Goldman Sachs expects the Japanese yen to rise to the low 140s against the U.S. dollar this year
• Says its a prime hedge against growing concerns over U.S. economic weakness and trade tensions
• Says yen tends to perform well when U.S. equities and real yields fall together
• “The yen has room to appreciate in this less benign scenario where we and the market are increasing the probability of recession”
• “If the US labor market data surprises on the weak side... the yen is a very good hedge.”

Goldman recently revised its U.S. outlook to include three Fed rate cuts, citing the likely economic drag from President Trump’s expected tariffs.