What's Top of Mind in Macro Research Yen intervention, tech rebound but leadership rotation, US jobs report

Economics Research 5 August 2026 | 4:39PM EDT

What’s Top of Mind in Macro Research: Yen intervention, tech rebound but leadership rotation, US jobs report

This week: Jenny Grimberg | n A coordinated Yen intervention Goldman Sachs & Co. LLC

Allison Nathan n A tech rebound, but structural leadership rotation | Goldman Sachs & Co. LLC n US jobs report, Middle East conflict, AI adoption and investment trends Ashley Rhodes | Goldman Sachs & Co. LLC Transcript

A coordinated Yen intervention We believe the relatively muted response in USD/JPY to the recent coordinated US-Japan intervention to curb Yen depreciation demonstrates the diminishing returns on intervention when the depreciation is broadly in line with macro and market fundamentals. We think sustainably strengthening the Yen would require a shift in the domestic policy mix or a deterioration in the global growth outlook, neither of which we view as likely. Indeed, we continue to expect the BoJ to hike rates at an only gradual pace and are skeptical that the US Treasury’s involvement in the recent intervention is a harbinger of significant Japanese policy changes. As such, we think encouraging Japanese investors to bring capital back home would be the most powerful way to durably impact the currency, though such a policy would likely entail significant trade-offs. Beyond temporarily strengthening the Yen, the intervention also fueled concerns about US Treasury market functioning, though Japan has taken steps to reduce its imprint on the US rates market, and potential usage of the Fed’s FIMA facility would further alleviate these concerns.

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Goldman Sachs What’s Top of Mind in Macro Research

The relatively muted response in USD/JPY reinforces our view that the fundamental backdrop for the Yen remains negative Spot move in USD/JPY over two weeks following the first day of intervention scaled by total size in $bn, bp

-Oct-22 29-Apr-24 11-Jul-24 30-Apr-26 30-Jul-26 First day of intervention For the latest round of intervention, we use the change in spot from July 30 through August 4 (vs. two weeks for the others).

Source: Bloomberg, BoJ, Goldman Sachs Global Investment Research.

A tech rebound, but structural leadership rotation While tech stocks have staged a sharp rebound to start the month, equity market leadership has structurally rotated from mega-cap tech dominance to broader value and small-cap sectors, which we think creates greater scope for investors to generate alpha through active sector and geographic allocation. At the sector level, ongoing investment in energy security, critical infrastructure, and defense should continue to support Industrials and many “old economy” industries that investors neglected for so long, while the moderation of tech valuations from their peaks has created selective opportunities in companies with attractive earnings growth prospects. And at the country level, we continue to see value in maintaining US exposure while also selectively diversifying across regions.

What else is on our radar? n We’re focused on Friday’s US jobs report, which we estimate will show a 75k rise in nonfarm payrolls in July, reflecting an incremental boost from World Cup-related hiring and a modest increase in government payrolls, though we note that July payrolls have missed consensus expectations in recent years. We estimate that the unemployment rate rebounded to 4.3% in July (from 4.2% in June), reflecting a stabilization in continuing jobless claims but a partial reversal of the large decline in the participation rate in June. And we expect the report to show a 0.3% mom rise in average hourly earnings. n We’re also continuing to closely watch the Middle East conflict. While oil prices have retreated further on the back of recent de-escalatory headlines and the market is now pricing only a moderate risk premium, we find that the physical oil market is tightening, which will likely remain the case unless and until a new US-Iran deal is reached.