Yen Weakens Again
USDJPY resumed its upward journey overnight after Trade Minister Nishimura said USDJPY at 100 would not be a problem. In his view, only a move up to the 110-120 range would have a detrimental economic impact due to the higher import costs this would induce. News that the Japanese government’s Council on Economic and Fiscal policy was due to meet also added to the yen selling on unsubstantiated speculation that new yen negative policies might be announced afterwards. Earlier, Vice Finance Minister for International Affairs Nakao said he is closely watching the yen’s rebound (since the BoJ meeting) and would not hesitate to take action if needed. And finally, a sudden increase in geo-political tensions on the Korea peninsula probably gave USDJPY another push higher too. A stronger private sector China PMI briefly supported risk appetite, although mixed earnings reports out of the US provided a risk-negative counterbalance.
Click here to read the full report: UBS Morning Adviser
UBS Investment Bank