6 Jun 2013
Flash: Risk Aversion supporting Yen - BTMU
FXstreet.com (Barcelona) - Lee Hardman, FX Analyst at the Bank of Tokyo Mitsubishi UFJ Notes that the more risk-averse trading conditions in the near-term are also supporting the yen which is rebounding modestly after its sharp uninterrupted decline between November and May.
They add that investor expectations that aggressive BoJ monetary easing would lead to pick up in yen weakening capital outflows from Japan in the new fiscal year are still not being met. Japanese investors continued to take profits selling another net JPY1.17 trillion of foreign bonds in the week ending the 31st May taking total sales over the last three weeks to JPY3.1 trillion. Further, they note that it has also been reported overnight that the BoJ is said to be divided upon measures to quell bond market volatility ahead of next week’s meeting. They write, “So far the BoJ has increased the frequency of its government bond purchases and extended one-year fixed-rate loans to financial institutions. Board members are said to be split over whether to extend the maturity of loans to two years.”
They add that investor expectations that aggressive BoJ monetary easing would lead to pick up in yen weakening capital outflows from Japan in the new fiscal year are still not being met. Japanese investors continued to take profits selling another net JPY1.17 trillion of foreign bonds in the week ending the 31st May taking total sales over the last three weeks to JPY3.1 trillion. Further, they note that it has also been reported overnight that the BoJ is said to be divided upon measures to quell bond market volatility ahead of next week’s meeting. They write, “So far the BoJ has increased the frequency of its government bond purchases and extended one-year fixed-rate loans to financial institutions. Board members are said to be split over whether to extend the maturity of loans to two years.”