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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
JAPAN
- In the past year, the rise in global uncertainty combined with the ‘hawkish’ Fed (recently announcing the acceleration of the ‘tapering’) have been supporting the US Dollar against major crosses.
- The ECB and BoJ are both far from starting their monetary policy normalization, hence the policy divergence (vs. the US) could continue to weigh on the domestic currencies (Euro, JPY).
- USDJPY recently rose to a 5-year high, breaking above the 115 level yesterday, which clears the path for a move up to 118.66 (December 2016 high).
- The moderate ‘risk-on’ environment (with VIX trading below 20) has also been pushing the Yen lower, levitating global equities to new highs.
- It will be interesting to see if the JPY weakness will be associated with a positive momentum in Japanese equities this year.
- The chart below shows that the two times series diverged significantly in the 18 months following the Covid19 shock; while the uncertainty over the economic outlook was supporting the Yen, the surge in global liquidity was pushing Japanese equities to new highs.
Source: Bloomberg/MNI
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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