6 Jan 2015
Yen strengthens on heightened global growth concerns – BTMU
FXStreet (Barcelona) - Lee Hardman, Currency Analyst at Bank of Tokyo-Mitsubishi UFJ, notes that Yen has strengthened in the Asian session deriving support from increasing concerns over slowing global growth by the ongoing decline in crude oil prices.
Key Quotes
“The yen has continued to strengthen in the Asian trading session after USD/JPY fell back below the 120.00-level yesterday. The yen is deriving support from heightened investor concerns over slowing global growth in the near-term. The trade-weighted yen bottomed in early December and has since rebounded modestly.”
“Heightened investor concerns over slowing global growth are being reinforced by the ongoing decline in the price of crude oil which has extended its decline to over 50% since the middle of last year. The price of West Texas Intermediate and Brent crude oil have both fallen towards USD50/barrel.”
“The steepness of the decline in the price of crude oil is prompting heightened investor concerns that global demand may be weaker than expected.”
“We have been assuming that the decline in the price of crude oil is mainly the result of a positive supply side shock and of the shift in strategy from OPEC to no longer actively cut production to maintain higher prices.”
“If our assumption is correct, then the decline in the price of crude oil should ultimately be a positive for the global growth outlook in the year ahead.”
“However, we will need to closely monitor global growth in the near-term to assess if the sharp ongoing decline in the price of crude oil is signalling a more worrying sharper slowdown in global growth.”
Key Quotes
“The yen has continued to strengthen in the Asian trading session after USD/JPY fell back below the 120.00-level yesterday. The yen is deriving support from heightened investor concerns over slowing global growth in the near-term. The trade-weighted yen bottomed in early December and has since rebounded modestly.”
“Heightened investor concerns over slowing global growth are being reinforced by the ongoing decline in the price of crude oil which has extended its decline to over 50% since the middle of last year. The price of West Texas Intermediate and Brent crude oil have both fallen towards USD50/barrel.”
“The steepness of the decline in the price of crude oil is prompting heightened investor concerns that global demand may be weaker than expected.”
“We have been assuming that the decline in the price of crude oil is mainly the result of a positive supply side shock and of the shift in strategy from OPEC to no longer actively cut production to maintain higher prices.”
“If our assumption is correct, then the decline in the price of crude oil should ultimately be a positive for the global growth outlook in the year ahead.”
“However, we will need to closely monitor global growth in the near-term to assess if the sharp ongoing decline in the price of crude oil is signalling a more worrying sharper slowdown in global growth.”