The Japanese yen remain relatively safe bets, Morgan Stanley said Tuesday, but the investment bank picked the U.S. dollar as the best safe-haven currency in what’s left of turbulent 2020.
The greenback fell to a 27-month low on Tuesday against a basket of its peers, where the dollar index reached 92.477 — a level not seen since May 2018 as investors took on more risk. The S&P 500 rose to its highest level ever after regaining all of its coronavirus-related losses, having rallied more than 54% from its March low.
The Japanese yen remain relatively safe bet, Morgan Stanley said on Tuesday, but the investment bank picked the U.S. dollar as the best safe-haven currency in what’s left of turbulent 2020.
The yen is traditionally seen as a low-yielding currency because the Bank of Japan historically has one of the lowest interest rates among developed countries. Its short-term policy interest rate is currently still negative. Policymakers have generally been seen as trying to maintain policies that would help weaken the yen.
Japanese Bank Lending for July increased by 6.3% annually. Forex traders can compare this to Japanese Bank Lending for June, which increased by 6.2% annualized. The Preliminary Japanese Current Account Balance for June was reported at ¥167.5B. Economists predicted a figure of ¥110.0B. Forex traders can compare this to the Japanese Current Account Balance for May, reported at ¥1,176.8B.
The Japanese Eco Watchers Survey Current Index for July was reported at 41.1, and the Japanese Eco Watchers Survey Outlook Index was reported at 36.0. Economists predicted a figure of 46.6 and 48.2. Forex traders can compare this to the Japanese Eco Watchers Survey Current Index for June, reported at 38.8 and to the Japanese Eco Watchers Survey Outlook Index, reported at 44.0.
The German ZEW Survey Current Situation Index for August is predicted at -68.8 and the German ZEW Survey Economic Sentiment Index at 58.0. Forex traders can compare this to the German ZEW Survey Current Situation Index for July, reported at -80.9, and to the German ZEW Survey Economic Sentiment Index, reported at 59.3.
The forecast for the EUR/JPY remains bearish after it failed to extend its advance. With the global Covid-19 pandemic predicted to accelerate, safe-haven demand for the Japanese Yen is likely to increase. Economic data out of Australia, Japan, and Singapore disappointed, suggesting the post-lockdown recovery is fizzling out.
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