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Analysts at the US investment banking giant, Goldman Sachs, believe that buying Yen as a hedge against a global recession is the best bet. However, they do not see a global recession coming in the near-term.

Key Quotes:

“A global recession is likely to see falling US yields alongside falling US stocks.

USD/JPY the most likely pair to weaken.  

US/yen falls during risk-off periods as investors move into the safe-haven yen.

BOJ yield curve control policy fixes nominal yields in Japan, thus a US yield fall makes a more favourable Japan / US differential.

Not expecting a global recession in the near term.

But do not expect a drop in activity ex-US.”