Forex Flash: Yen bounced off G7 concerns – OCBC Bank

Emmanuel Ng of OCBC Bank notes that the Yen bounced against majors on Tuesday as concerns/confusion towards G7 discomfort over Yen weakness mounted ahead of the G20 weekend.

He comments that while a G7 statement on foreign exchange rates released on Tuesday did not target Japan but reaffirmed a commitment to market-determined exchange rates, an unnamed G7 official noted that the statement was a reference to the Yen. Elsewhere, he sees that the majors ended slightly higher on the dollar as the greenback fell against the JPY and with risk appetite levels still in positive territory.

He thinks that any concerted G7 stance on the latest global currency developments may remain somewhat lacking at this juncture, with confusing and contradicting comments in the past few sessions from officials in the US, Japan, Canada, and even France, Germany, and Switzerland demonstrating a less than unified stance. He writes, “Notably, the ECB’s Draghi also played down talk of any currency wars while the SNB indicated that it expected the CHF to continue to weaken. Ahead, the focus may shift to the BOJ meeting tomorrow with investors on the lookout for further dovish rhetoric.”