With geopolitical tension rising in the Asia, the Japanese Yen benefitted from its safe haven status in the second half of May, gaining around 400 pips in one week.
The Japanese large positive external balance as well as huge international investments have driven yen’s demand even further, which mark the strength at 110 against the dollar – down from May’s high of above 114.
Although the country has defeated the long-year deflation, real price gains still remain weak at 0.2% year on year – far below the Bank of Japan’s target of 2%.
In the long term perspective, we still expect the Yen to weaken, and potentially driving the USDJPY towards the high around 120.
The Japanese large positive external balance as well as huge international investments have driven yen’s demand even further, which mark the strength at 110 against the dollar – down from May’s high of above 114.
Although the country has defeated the long-year deflation, real price gains still remain weak at 0.2% year on year – far below the Bank of Japan’s target of 2%.
In the long term perspective, we still expect the Yen to weaken, and potentially driving the USDJPY towards the high around 120.