The Japanese yen in recent days has remained mostly steady near it´s lowest level since the earthquake in March, holding within a tight range around 79.00 since late Thursday. Still the BBH Global Currency Strategy team suggests: “Given the low volatility and the US and European debt tensions, we continue to suspect that the risk of BOJ intervention is low. At the same time, as the euro zone economy appears to be losing momentum and the US economy is disappointing, the Japanese economy looks poised stage a stronger recovery in the coming months.”
The BBH analysts adds: “We note that the Nikkei is the best performing G7 equity market over the past month. Foreign investors had been substantial buyers of Japanese share in the first part of the year (~$40 bln through April), repatriated some money in Q2 but in recent weeks have returned to the buy side again.”
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