Yen to remain underpinned for now - MUFG

Derek Halpenny, European Head of GMR at MUFG, notes that the Japanese yen remains the top performing G10 currency so far this quarter and is up 5.6% in Q2 to date.

Key Quotes

“Given the above view of the FOMC delaying until July and given the probability that ‘Brexit’ fears are set to escalate over the coming weeks, we can only see the yen continuing to perform well in the short-term.

The fact that PM Abe’s fiscal stimulus program will not be compiled until the “autumn” has left the markets disappointed and the reticence of the BOJ to take further easing action has also helped support real yields in Japan. GBP/JPY is down 4.3% from the high on Tuesday and we see further declines over the coming weeks as ‘Brexit’ fears inevitably escalate ahead of the vote on 23rd June and the yen is seen as the best viable destination over this period.”