Yen Loses Safe Haven Appeal

July 24, 2018 Share Print 0

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

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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.