Yen Set to Strengthen to Low 140s, Says Goldman, as Bitcoin Struggles Like Tech Stocks

As global markets brace for fallout from the Trump administration’s new tariff regime, Goldman Sachs is turning to a familiar safe haven: the Japanese yen.

On Wednesday, the BTC/JPY pair fell 1% on Japan’s bitFlyer exchange after failing to break above a key technical resistance level formed by a trendline drawn from Bitcoin’s record high on January 20, according to TradingView data.

Bitcoin’s losses weren’t limited to yen terms. The cryptocurrency also declined against the U.S. dollar, as did broader equity markets across Asia and U.S. futures — all moving cautiously ahead of President Trump’s scheduled “Liberation Day” announcement of fresh reciprocal tariffs on major trading partners including China, Canada, and Mexico.

The rising threat of a global trade war has increased concerns over a potential U.S. recession. Investment giants like Goldman Sachs and JPMorgan have raised their probability estimates for an economic slowdown, citing weaker growth prospects and policy uncertainty.

While some crypto analysts argue that Bitcoin could act as a hedge in a downturn, Goldman disagrees — at least for now. The firm maintains that the yen remains the most reliable defensive play.

“The Japanese yen stands out as the most effective hedge in the event that U.S. recession risks intensify,” said Kamakshya Trivedi, Head of Global FX, Rates, and EM Strategy at Goldman Sachs, in a note cited by Bloomberg.

Trivedi also highlighted that the yen tends to perform well in environments where U.S. real interest rates and equities fall in tandem — conditions that often coincide with labor market weakness.

Despite Bitcoin’s reputation as “digital gold,” its behavior often mirrors high-growth tech stocks rather than traditional safe-haven assets. That pattern has held true during past risk-off episodes — when stock markets fall sharply, Bitcoin tends to follow suit.

Another complicating factor is the yen’s role in global carry trades. A stronger yen can force the unwinding of leveraged bets made with yen-denominated loans. These reversals often spark broader risk-off sentiment. Crypto markets experienced such a scenario in August 2024, when a surge in the yen triggered a sharp sell-off that sent Bitcoin plummeting from $65,000 to $50,000 within a matter of days.

Goldman Sachs now projects the yen will rise to the low 140s against the dollar over the course of the year. As of this writing, the USD/JPY pair was trading around 149.77. Analysts point to the narrowing yield gap between U.S. and Japanese 10-year bonds — with Japanese yields recently falling to their lowest since August 2022 — as a key factor supporting yen appreciation.

As markets await Trump’s tariff announcement, risk aversion remains elevated. And for now, it appears investors may favor the traditional haven of the yen over the digital promise of Bitcoin.