The Yen, at pixel time trading at 80.02, since the start of April:
As you can see, the appreciation — which has now more than reversed the decline that followed the G7 intervention on March 18 — has been ongoing for roughly a month now.
The stories we’ve seen today about the Yen’s strengthening back to sub-80 levels are mostly about investors selling risk assets, raising the possibility of another similarly ineffective intervention.
Maybe — or perhaps this is more to do with the recent widespread decline in the dollar against most other developed-word currencies, or another unwinding of carry trades, or repatriation finally starting to take hold, or something else entirely. Hard to say.
We’ve argued before that the economic fundamentals would seem to point towards a weaker, not a stronger, yen. And we still think that’s the case.
But given what Japan has experienced this year, we probably shouldn’t be surprised that big swings continue to be a feature of its currency.
Related links:
Yen moves – FT Alphaville
The yen and economic fundamentals – FT Alphaville