Goldman Sachs analysts suggest the Japanese yen as a hedge against potential market shocks linked to the artificial intelligence sector. The bank notes that recent changes in Japanese domestic policy have reduced the currency's tendency to decline when global bond yields rise.
The Nikkei 225 index closed at 62,693.16 on October 23, remaining approximately 14% below its record high of 73,007. On October 22, the index fell 2.65%, marking its lowest finish since July 30, while the TOPIX index declined by 1.14%.
The yen strengthened by 0.9% against the dollar on October 22 and reached its highest level in over a month on October 23. Goldman Sachs recommends shorting the USD/JPY pair as a primary strategy to mitigate risks from growth instability or an AI-driven market correction.
Despite the long-term outlook, the bank currently favors selling the euro against the yen. Market participants are awaiting December rate decisions, with 83% of economists surveyed by Bloomberg expecting the Bank of Japan to raise rates from the current 1.25% level.
