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Yen are you a safe haven or not?

Analysts will tell you that Japan is a current account surplus currency. However, with global tight yield spreads, the economy finds it difficult to recycle surpluses efficiently. How are they relieving the pressure? Corporate Japan is directly investing abroad, an important alternate channel for recycling the country’s surplus. If you add the BoJ to this equation, using tactical direct currency intervention, then the upside for the currency should be limited. Everyone and their mother seems to be short yen outright and for risk reasons has had a horrid time depreciating the yen. Thus far, it’s been a long slow grind. There is growth data out this week.

Below are some of the highlights of the week:


ASIA

 

Other links:

AMERICAS Week in FX [1]
EUROPE Week in FX [2]
Politics and Fixed Income trump FX [3]

 

WEEK AHEAD

  • Retail sales data comes to us from NZD, USD and GBP
  • GBP, CAD and USD release inflation reports
  • Monetary policy minutes and statements come from JPY and AUD
  • JPY delivers growth data
  • EUR will acknowledge German ZEW economic sentiment
  • PPI data is released in USD and NZD
  • Claimants figures are observed in GBP and USD
  • USD finishes their week with Building permits and Philly Fed

 

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Dean Popplewell

Dean Popplewell [8]

Vice-President of Market Analysis at MarketPulse [9]
Dean Popplewell has nearly two decades of experience trading currencies and fixed income instruments. He has a deep understanding of market fundamentals and the impact of global events on capital markets. He is respected among professional traders for his skilled analysis and career history as global head of trading for firms such as Scotia Capital and BMO Nesbitt Burns. Since joining OANDA in 2006, Dean has played an instrumental role in driving awareness of the forex market as an emerging asset class for retail investors, as well as providing expert counsel to a number of internal teams on how to best serve clients and industry stakeholders.
Dean Popplewell
Dean Popplewell

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