Why might the Japanese yen strengthen amidst escalating conflict?

The yen may strengthen as it attracts safe-haven capital during periods of global asset sell-offs.

What is the expert's favorite trade regarding currency dynamics?

The expert's favorite trade is to short the US dollar against the Japanese yen, anticipating a rally in the yen.

How could Japanese investor behavior impact the yen's value?

If Japanese investors repatriate their substantial foreign asset holdings due to global instability, it could boost the yen.

Home / Business and Economy / Yen Surge Predicted Amid Mideast Conflict

Yen Surge Predicted Amid Mideast Conflict

29 Mar

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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.

Yen Surge Predicted Amid Mideast Conflict

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.