As JPY weakness becomes increasingly pronounced, investors are searching elsewhere for higher yield in currency space. A chart of an equally weighted basket of AUD, NZD, and MXN weighed against the JPY suggests a revisit of the highs of the past two decades. Our recently published report FX Volt: Who’s buying, who’s selling shows that most of the appreciation in USD/JPY was in the US and European time-zone in Q1; however, the start of Q2 suggests that the Asian time-zone is also participating. The change in regional behaviour likely further catalyses a weaker JPY and stronger Nikkei.
Click here to read the full report: Technical Research
Barclays