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The Japanese currency is not being used as a safe-haven asset by investors at this moment as markets are not concerned about coronavirus either, in the opinion of strategist at Westpac Institutional Bank.

Key quotes

“The sharp recovery in USD/JPY despite the ‘polynomial’ rise in confirmed coronavirus cases suggests markets are not concerned.”

“The outbreak and aggressive policies are set to contain coronavirus to have a major impact on growth in both China and the global economy. We are now forecasting 5.3% for China in 2020 and just 2.8% for global growth.”

“From a risk-reward perspective, we will stick with the view that USD/JPY is a sell on strength, but would rather wait for a move above 110.50 before selling.”