On Friday, the Japanese yen sagged slightly against its competitors in Asia trade, as Japanese authorities’ negotiations failed to provide a new direction to the perceived safety of the yen.
Meanwhile, the major US currency grew to ¥112.27 after dropping as low as ¥111.88 in the morning, compared to ¥112.37 on Thursday in New York as well as a recent 15-month low of ¥110.98 achieved in Asia trade ealry afternoon.
According to chief FX strategist of Mitsubishi UFJ Morgan Stanley, Daisaku Ueno the current trend has definitely changed. Now it’s apparent that the evergreen buck is going to head downward against the Japanese yen over upcoming months.
The vast majority of market participants have firmly decided to get rid of their riskier assets in favor of safer traditional haven assets, including the US Treasuries and the yen, as ongoing crude oil price slump as well as an abrupt sell-off in global stocks have drastically enhanced the mood of risk aversion.
In spite of the fact the BOJ’s last month decision to set negative rates for the first time, the Japanese major currency failed to sag. On the contrary, we see it strengthened by 8% for just two weeks. It’s because investors chose safety.