JPY : May Fall Because Abe`s Resignation

(Tue, 1 Sept 2020). Japanese Yen fell, markets may have bet on Abenomics continuation. US Dollar declined despite broad weakness in global stock markets. Australian Dollar eyeing RBA, JPY could be at risk to further losses. The anti-risk Japanese Yen was the worst-performing major currency over the past 24 hours. This is despite weakness in most stock sectors during the Wall Street trading session. The Dow Jones Industrial Average and S&P 500 closed -0.78% and -0.22% on Monday while the tech-heavy Nasdaq 100 managed to clock in a 0.68% increase.

Weakness in the Yen may have been as a consequence from the end of last week when Japanese Prime Minister Shinzo Abe resigned for health reasons. The markets may be betting on Abe’s successor to continue his ‘Abenomics’ stimulus plan. The Nikkei 225 outperformed its APAC peers on Monday.

Despite losses in the majority of stocks on Monday, the haven-linked US Dollar also aimed slightly lower. The Greenback was falling alongside longer-dated Treasury yields. Fed Vice Chair Richard Clarida noted earlier that ‘there potentially is a place for yield-curve control’. Falling returns in government bonds may have contributed to the lackluster performance in USD.

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