Yen: special focus

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The yen has depreciated sharply since Shinzo Abe returned to power as Japanese prime minister last year, promising to loosen monetary policy and weaken the currency in a bid to reflate the economy. With Japan one of the first movers in the recent spate of currency wars, the foreign exchange market is now waiting to see if new leadership at the Bank of Japan (BoJ) can deliver on the government's pledge.

Recent Euromoney coverage on the yen:

BoJ changes tack in bid to restore confidence in QE
September 2016
The Bank of Japan has unveiled a new strategy in its fight against persistently low inflation amid concerns its QE and negative interest rates regime wasn't working and may even be hurting the economy. Attention now turns to other global central banks to see if they will change course too.

Don’t believe the currency-war hype on Japan
May 2016
Japan could realize its goal of a weaker yen without the need for FX intervention, say analysts.

Against the tide: Asia will drive the dollar
March 2016
Weaknesses in Japan and Asia will mean a flight to quality.

Country risk: Spike in Japanese risk puts investors in a funk
March 2016


Japan investors-R-600
The sovereign improved last year, but experts have doubts over its economic prospects, and there are political risks from possible snap elections in the summer.

Japan in yen policy crisis
February 2016
All the hard work of Abenomics has been undermined by weeks of frantic trading that has seen the yen appreciate dramatically on safe-haven flows, with QE and even an announcement on negative rates having little impact. The market is now waiting to see if the Bank of Japan has any more tricks up its sleeve.

Old habits die hard as nervous investors flee to the yen
September 2015


yen banknote-R-600
The Bank of Japan (BoJ) has worked hard to weaken its currency in recent months and had achieved some considerable success with its quantitative easing (QE) programme, with yen levels at their weakest against the dollar for more than a decade. The global panic after China’s devaluation of the renminbi saw the yen quickly bounce back, but authorities are unlikely to give up.

Japan’s risks raise possibility of further downgrade
September 2015
Abenomics had been designed to rescue Japan from its awful deflationary torpor, but the economy is struggling again and its troubles could become a lot worse if China buckles.

Against the tide: World of the dollar and yen
August 2015
Structural problems and over-leverage mean the focus will switch to Asia for the next global currency moves.


Traditional currency correlations breaking down, warn observers
July 2015
The shift in investor sentiment towards yen eases one of the key constraints on positioning for a core negative JPY view, says RBC.

Oil and Abenomics in the great yen tug of war
January 2015
The yen has been quietly strengthening in recent days, amid renewed concerns about global demand pushing down the price of oil and fresh fears over Europe. If this trend persists, it could be problematic for Japanese prime minister Shinzo Abe, who is closely associated with a policy of yen weakness.

Japanese portfolio flows support weaker yen but raise default risk
November 2014
Long-awaited changes announced last week to the composition of Japan's state pension fund portfolios, combined with increasing flows into foreign – predominantly US dollar – assets from retail investors and the insurance sector, should weaken the yen, but could be storing up problems in the long term.

Yen depreciation back on track after safe-haven strengthening
October 2014
A momentary strengthening of the yen amid market panic coincided with reports the government might be having second thoughts about key planks of the reform agenda – the consumption tax and a weak yen. But analysts insist there has been no change of policy, but pension and energy reforms hold the key.

Economists keep the faith in Abenomics despite Q2 data
August 2014
Japan’s Q2 contraction, thanks to the April sales tax, has exacted a short-term toll on output, but Abenomics – a policy of delivering inflation and shocking the economy into growth – is still on track, say economists.

Japan: Dealers hold JGB positions as volume slumps
March 2014
Amid a sharp slowdown in institutional trading volume of Japanese government bonds, Mizuho Securities and Mitsubishi UFJ Morgan Stanley Securities have held their position as the market’s leading dealers.

Diminishing returns from weak yen triggers Abenomics fears
February 2014
Sunday’s win in Tokyo’s gubernatorial election for Abe supporter Yoichi Masuzoe was a fillip to the PM’s economic programme, but faltering exports, weak sequential economic data and a peak in output/inflation suggest the yen needs to be much weaker for Abenomics to play out.

USDJPY could be ready for lift-off
November 2013
The dollar/yen trade is showing signs of breaking higher, but can the Japanese currency maintain its weakening momentum?

Assistant Bank of Japan governor sanguine on consumption-tax impact as fears grow
November 2013
BoJ official defends negative-growth impact of sales tax due in April amid mixed economic data.

Is the yen now the world's premier safe haven?
October 2013
The yen has long been seen as one of the principal safe-haven currencies, and in a world where US politicians flirt with dollar default, some view it as the world’s premier safe haven.

Beware the FX carry trade
October 2013
'The yen should be the ultimate winner if equity market weakness spreads from China to other markets.'

Yen haven bid could return before debt deadline
October 2013
Safe-haven demand for the Japanese yen could return next week, despite the emergence of a more risk-positive tone in global markets, after news that negotiations to extend the debt-ceiling deadline had begun between Republican congressional leaders and the White House.

Shinzo Abe faces up to his toughest battle
September 2013
Prime minister Shinzo Abe’s radical policies have lifted Japan from its slumber. His supporters say he’s slain the deflation dragon. But what tools can he find to win the next fight – a looming fiscal crisis?

Japan: The ifs and buts of Abenomics
September 2013
The Abenomics high might give Japan’s markets a hangover if structural reforms are not implemented.

Brains behind Abenomics urges PM to show his brawn
September 2013
Japanese newspapers often refer to Koichi Hamada as "the brains behind Abenomics". During a recent visit to Tokyo, the 77-year-old special adviser to Abe spoke frankly to Euromoney not only about Abenomics, but also the character and nationalism of Japan’s prime minister.

Still hope for yen bears to emerge from hibernation
August 2013
Price action in the past few months has been frustrating for yen bears, but the downtrend in the Japanese currency is likely to recapture some of its momentum over the medium term. 

Japan: Abenomics set for next stage as outbound M&A booms
August 2013
Tankan survey turns positive; largest buyer of southeast Asian companies.

Surging yen volumes send FX market turnover to record levels
July 2013
FX trading volumes surged to record levels in April, according to semi-annual surveys from the world’s largest central banks, as the yen market sparked back to life.

US/Japan divergence from Europe highlights G10 risk shift – ECR Q2 2013 results
July 2013
Perceptions of growth, the labour market and fiscal situation have all been enhanced after the Japanese government’s deliberate policy shift, aided by the central bank’s stimulus measures to boost bank liquidity and depreciate the yen to eradicate years of deflation and moribund growth.

Reserve managers reveal penchant for the yen
July 2013
Figures from the IMF show that the world’s reserve managers have built up their holdings in the yen to levels last seen before the collapse of Lehman Brothers.

Japan’s government pension fund shift and yen volatility could boost Europe flows
June 2013
The shift in the asset allocation of the world’s largest public pension funds in favour of foreign stocks and bonds could provide a technical boost for the eurozone, despite recently dashed hopes of Japanese flows.

Yen sellers could find an opportunity amid the mayhem
June 2013
Violent price action during the last 24 hours might suggest the yen-weakening trend has run its course, but once the dust settles it might just have left investors with a better entry-level to sell the Japanese currency.

Rising volatility prompts Japan bond angst
May 2013
The Bank of Japan’s bond-buying plan is bedevilled by contradictions: it seeks to promote financial stability but has triggered inevitable bouts of market volatility. What’s more, the central bank wants low yields and greater inflation expectations. A new communications policy is needed, analysts say.

Yen surge unlikely to faze Japanese corporates
May 2013 

Perfect storm pushes USDJPY through ¥100
May 2013

SNB reveals a penchant for the yen
May 2013

Fears of damaging Japanese inflows into emerging markets yet to materialize
May 2013

Will 2013 be the year of foreign exchange?
May 2013

Bank of Japan’s monetary-easing gambit faces nervous wait
April 2013

Japanese giant has the power to sink the yen
April 2013

Yen weakness only halfway through; G20 meeting should hold little fear for yen bears
April 2013 

Japanese investors yet to jump into the yen mineshaft
April 2013