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Forex pairs in this Article » USD/JPY (Barcelona) - Lee Hardman, FX analyst at the Bank of Tokyo Mitsubishi UFJ notes that JPY is benefitting from the general flight to quality bid in financial markets driven by heightened investor uncertainty in the near-term prompted by the increasing likelihood of international military intervention in Syria.

Key Quotes

“The yen has strengthened early this week with AUD/JPY and NZD/JPY both declining sharply by around 2.6% and 1.8% respectively since late last week.”

“The yen is supported in more risk-averse trading conditions by Japan’s more modest current account surplus which totaled around 1.0% of GDP in the twelve months to June.”

“Heightened investor uncertainty related to potential military conflict in Syria has reinforced selling of riskier assets which is hitting emerging market currencies from countries with elevated current account deficits hard, exacerbating the negative impact from tightening global financing conditions.”
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