Comments from a piece by Bank of America / Merrill Lynch
Resilient despite 5% in the Nikkei since US President Trump approved tariffs on some Chinese imports (June 14)
Boa ML cite:
- Fed tightening
- Japan's outbound M&A activity (i.e. results in selling of yen) is at a record rate
- Sales of Japanese equities by foreigners & Japanese investors buying foreign equities (again, result is sellers of yen)
- Lack of short JPY positions
The analysts says USD/JPY "may continue if trade tensions rise only gradually, until the market starts pricing in slower U.S. growth and/or Fed hiking path" which could be some time away
Adds the caveat that yen is not immune to risk-off market moves
via BBG
