As markets brace for U.S. recession risks and the looming impact of “Liberation Day” tariffs, Goldman Sachs is pointing to the Japanese yen as the go-to hedge for investors seeking safety.
On Wednesday, the Bitcoin-to-yen (BTC/JPY) trading pair struggled at a key technical resistance level, coinciding with Goldman’s renewed call that the yen remains the strongest defense against mounting economic headwinds in the U.S. According to TradingView data, BTC/JPY on Japan-based exchange bitFlyer fell 1% after failing to breach a trendline extending from its record high on January 20.
Bitcoin’s price in U.S. dollars mirrored the decline, with both crypto and equity markets cautious ahead of President Donald Trump’s widely anticipated reciprocal tariffs targeting 15 nations — a move that could intensify global trade tensions.
The uncertainty has pushed major investment banks, including JPMorgan and Goldman Sachs, to raise the likelihood of a U.S. recession or back-to-back quarters of declining growth.
Some in the crypto space maintain that Bitcoin could behave like a safe-haven asset during an economic downturn. But Goldman sees the yen — a traditional favorite in turbulent times — as the more reliable shield.
“The yen provides the best hedge against rising U.S. recession risks,” said Kamakshya Trivedi, Goldman’s head of global foreign exchange, rates, and emerging market strategy, in comments reported by Bloomberg. He also noted that the yen performs particularly well when U.S. stocks and real (inflation-adjusted) interest rates fall together — often a hallmark of a weakening labor market.
Though Bitcoin has long been dubbed “digital gold,” it continues to trade in close correlation with high-growth tech stocks. This means that any broad sell-off triggered by tariff-related economic anxiety could easily spill into the crypto space.
Adding to the pressure: yen strength tends to unwind so-called “carry trades,” where investors borrow in low-yielding currencies like the yen to fund riskier bets. When the yen rallies, these trades are often reversed, contributing to risk aversion across global markets. A similar dynamic unfolded in August of last year, when a rapid unwinding of yen-funded positions sent Bitcoin tumbling from $65,000 to $50,000 in just a few days.
Goldman Sachs expects the yen to appreciate against the U.S. dollar, forecasting a move into the low 140s this year. At the time of writing, USD/JPY traded around 149.77. The pair tends to track closely with the interest rate spread between U.S. and Japanese 10-year bonds — and with Japanese yields recently hitting their lowest point since August 2022, the setup favors further yen strength.
