GS Crook GS MORNING 1 JPY Spot Colour, 2 GPIF Q&A, 3 Japan Trade Idea, 4 New Oil Forecasts and 5 Hungary CPI Colour 8 Sep 2026

GS Crook - GS MORNING 1) JPY Spot Colour, 2) GPIF Q&A, 3) Japan Trade Idea, 4) New Oil Forecasts and 5) Hungary CPI Colour 8 Sep 2026 Adam Crook · Goldman Sachs · FX / Macro Sales Tue 8 Sep 2026, 5:04am ET

Highlights from GS Research, Trading and Sales: 1) JPY Spot Colour, 2) GPIF Q&A, 3) Japan Trade Idea, 4) New Oil Forecasts and 5) Hungary CPI Colour

1) G10 SPOT TRADING (SHINOTSUKA) – JPY Spot Update

BOTTOM LINE: Expectations for an earlier BOJ rate hike and a faster pace of tightening have helped ease concerns that the BOJ may fall behind the curve. At the same time, speculation around a potential GPIF allocation change and the technical break below 155, which had been an important support level, appear to have accelerated the adjustment of yen short positions.

LOCAL FLOWS: Until recently, 155 had been a firmly supported level even after two rounds of FX intervention, and it was also seen as an important reference level for domestic importers. However, market participants’ perception now appears to be changing, against the backdrop of a potential acceleration in the BOJ’s rate hike cycle and speculation around a GPIF allocation change. As a result, while importer USD- buying demand likely remains, they may no longer feel the same urgency to cover as before, and may instead be shifting toward waiting for further dips. Put differently, it is possible that a reasonable amount of hedging was already done in the 156-158 area, making it harder for additional USD-buying demand to emerge at current levels. Normally, USDJPY tends to rebound during the Tokyo session on the day after a sharp decline, but the rebound in Tokyo this week has been limited.

TECHNICALS: RSI has fallen to around 25, entering oversold territory. On the two occasions this year when the RSI declined to around 25, USDJPY subsequently rebounded. On the other hand, the underlying momentum still points lower. From a technical perspective, the weekly USDJPY chart has entered the Ichimoku cloud, and USDJPY is now trading around the 100-week moving average at 153.30. In addition, ％ the 61.8 retracement of the range since the Takaichi trade comes in around 153.28, which overlaps with current levels. The next important support is likely around 152.00/20, which corresponds to the low after the January rate check and the February low. If that level breaks, the psychological 150.00 level would come into focus.

GPIF: There is a debate around GPIF as to whether actual flows have already started, or whether it is currently still at the rebalancing stage. Locals tend to think the flow has not started but its still in the rebalancing level or within their freehand range. At the same time, however, I also recall that in the past, when GPIF announced an allocation change, the actual reallocation had already progressed to a meaningful extent by the time of the announcement. Therefore, it is difficult to completely rule out the possibility that some adjustment may already be underway. Given that a meaningful portion of GPIF’s

foreign bond allocation is understood to be in U.S. assets, any reduction in foreign bonds would naturally raise questions around potential UST selling. Alternatively, if GPIF were to take into account potential U.S. sensitivities and reduce European assets instead, the pressure could be more visible in EURJPY rather than USDJPY. Another possibility is that GPIF may not aggressively reduce existing foreign assets, but instead make it easier to direct new inflows or reinvestment proceeds toward Japanese assets. There is also the possibility that the current permissible deviation range could be widened from 6 percentage points to 10 percentage points, or even bit more percentage points. However, in that case, the market reaction could be more nuanced. On one hand, it could be interpreted as greater flexibility in GPIF’s allocation framework, or even as a de facto policy shift, which may send a stronger yen-supportive signal. On the other hand, if the market is already biased toward the idea that GPIF will directly reduce foreign assets, simply widening the deviation range could potentially be seen as a disappointment.

Q: How big could GPIF flow be? If decided to…