Yen becoming more favorable hedge against AI market shock, says Goldman Sachs

The exchange rate of the U.S. dollar against the yen is displayed outside a securities firm in Tokyo on Monday. The yen is becoming less vulnerable when global yields move higher, according to Goldman Sachs. The yen is becoming a more effective hedge against an artificial intelligence-driven market shock as changes in Japan's policy backdrop reduce the risk of the currency weakening sharply when global yields rise, according to Goldman Sachs. "The yen now looks like a more attractive hedge for procyclical portfolios than it has been over recent years, despite the global backdrop still arguing for further JPY weakness," strategists including Kamakshya Trivedi wrote in a note dated Friday. The call comes after the yen showed renewed signs of its traditional haven characteristics during last week's global technology stock rout.