Goldman Sachs: Prerequisites for Yen Intervention Not Yet Met

Strategists at Goldman Sachs stated that the conventional prerequisites for triggering yen intervention have not yet been met, including a rapid depreciation to levels that are clearly weak, a disconnect from fundamentals, and more forceful verbal intervention.

The yen "does not appear to be at particularly weak levels," and its movements are "closely tied to the repricing of fiscal risk premium and recent market shifts in expectations for the Bank of Japan's near-term policy," strategist Karen Reichgott Fishman wrote in the report.

Goldman Sachs believes that if a lack of US economic data leaves markets unable to challenge the current optimistic growth expectations, and if markets refocus on the possibility of an early general election in Japan, the yen has room to weaken further.