People walk along a street full of shops, bars and restaurants in Shibuya, Tokyo, on October 1. For investors to hold on to the yen in favour of the US dollar and other currencies, they will need to be persuaded that the economic outlook for Japan is better than for those other economies, and that’s a hard argument to make. Photo: AP
People walk along a street full of shops, bars and restaurants in Shibuya, Tokyo, on October 1. For investors to hold on to the yen in favour of the US dollar and other currencies, they will need to be persuaded that the economic outlook for Japan is better than for those other economies, and that’s a hard argument to make. Photo: AP
Neal Kimberley
Opinion

Opinion

Macroscope by Neal Kimberley

Why the Japanese yen rally may not last even if worries over the Covid-19 variant Omicron persist

  • The yen’s safe-haven status explains why investors favour it in times of uncertainty, but greed tends to conquer fear in markets
  • The interest rate differential against Japan’s currency, which increases the cost of holding yen, and the continuing weakness of the Japanese economy will reassert themselves

People walk along a street full of shops, bars and restaurants in Shibuya, Tokyo, on October 1. For investors to hold on to the yen in favour of the US dollar and other currencies, they will need to be persuaded that the economic outlook for Japan is better than for those other economies, and that’s a hard argument to make. Photo: AP
People walk along a street full of shops, bars and restaurants in Shibuya, Tokyo, on October 1. For investors to hold on to the yen in favour of the US dollar and other currencies, they will need to be persuaded that the economic outlook for Japan is better than for those other economies, and that’s a hard argument to make. Photo: AP
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