G-20’s Reaction to the Yen’s Fall

Investors are closely watching the ongoing Group of 20 Nations meeting in Washington to see if Japan comes under fire for following policies that have led to a sharp devaluation of its currency. But analysts say the yen should continue on its weakening path, regardless.

On Wednesday on the eve of the two-day meeting U.S. Treasury Secretary Jack Lew warned against the perils of “beggar thy neighbor” currency devaluations pointing to both China and Japan.

But Kumar Palghat, managing director at fixed income investment firm Kapstream Capital says: “I don’t think you’re going to get a lot of action from G-20. The yen will get a lot weaker than we are today. Market expectations are somewhere around 100 to 110 [against the U.S. dollar] and I think that’s right for Japan.”

CNBC

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.