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Yen Surge Predicted Amid Mideast Conflict
29 Mar
Summary
- Expert advises shorting the dollar against the yen if conflict escalates.
- Yen could attract safe haven flows as global assets decline.
- Japanese investors' foreign assets could fuel domestic investment, boosting yen.
As Middle East conflict intensifies, a notable shift in currency dynamics is predicted, favoring the Japanese yen over the US dollar. Stephen Jen, CEO of Eurizon SLJ Capital, advises investors to short the USD/JPY pair, anticipating a yen rally.
This projection stems from the potential for the yen to attract safe-haven capital during global asset sell-offs. Concurrently, a significant portion of Japanese investors' holdings in foreign assets, approximately 90% of the nation's GDP, could be repatriated, bolstering the yen.
The yen has recently weakened, breaching a critical 160 per dollar level, a point at which financial authorities previously intervened. However, escalating conflict may alter this trend, as domestic investment potentially increases.
