Yen Loses Safe Haven Appeal

The trade is familiar to investors worldwide: in times of turmoil, rush for cover by buying the Japanese yen.

This year a global trade row has erupted, Donald Trump has lamented the dollar’s strength – ignoring a custom that U.S. presidents avoid openly interfering in financial markets – and the Chinese yuan has tumbled.

And yet the yen has stayed resolutely weak, becoming the weakest of the G10 developed market currencies this month.

The yen’s safe-haven status is not in doubt, underpinned by Japan’s nearly two trillion yen ($18 billion) monthly trade surplus. But without a massive world market shock to discourage Japanese investors from buying foreign assets, the yen is likely to stay weak – above all because the Bank of Japan lags behind its central bank peers in ending monetary stimulus.

via Reuters

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.

Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza