17 Jul 2014
JPY firmer following US sanctions against Russia - BTMU
FXStreet (Barcelona) - Lee Hardman, FX Analyst at the Bank of Tokyo Mitsubishi UFJ, observed the firmer pace of the JPY post-US sanctions.
Key Quotes
"The yen has strengthened modestly in the Asian trading session which follows the announcements yesterday by the US and EU that fresh sanctions will be imposed on Russia for failing to help stabilize ongoing developments in the Ukraine, which has weighed on global investor risk sentiment. The US has placed sanctions on some of Russia’s most prominent companies including Rosneft, the country’s biggest oil group, and two of Russia’s biggest banks, Gazprombank and VEB, as well as the largest independent natural gas producer, Novatek."
"The companies will be blocked from long-term US financing, while a group of defence companies will have their assets blocked. In addition, the EU announced that for the first time it will expand the legal basis for their sanctions regime to include “entities” that “were not only helping Ukrainian separatists but those who were “providing material and financing support” for Russian decision makers responsible for Crimean annexation and destabilisation in eastern Ukraine."
"The EU also said they would block the European Investment Bank from financing new projects in Russia and tasked their delegates at the European Bank for Reconstruction and Development to do the same. The Russian economy had already slowed materially during the first half of this year, and the new more biting economic sanctions are likely to dampen investor expectations for an economic rebound in the second half of this year. The rouble has gapped lower in early trading today with USD/RUB breaking above its 55-moving average for the first time since late April."
Key Quotes
"The yen has strengthened modestly in the Asian trading session which follows the announcements yesterday by the US and EU that fresh sanctions will be imposed on Russia for failing to help stabilize ongoing developments in the Ukraine, which has weighed on global investor risk sentiment. The US has placed sanctions on some of Russia’s most prominent companies including Rosneft, the country’s biggest oil group, and two of Russia’s biggest banks, Gazprombank and VEB, as well as the largest independent natural gas producer, Novatek."
"The companies will be blocked from long-term US financing, while a group of defence companies will have their assets blocked. In addition, the EU announced that for the first time it will expand the legal basis for their sanctions regime to include “entities” that “were not only helping Ukrainian separatists but those who were “providing material and financing support” for Russian decision makers responsible for Crimean annexation and destabilisation in eastern Ukraine."
"The EU also said they would block the European Investment Bank from financing new projects in Russia and tasked their delegates at the European Bank for Reconstruction and Development to do the same. The Russian economy had already slowed materially during the first half of this year, and the new more biting economic sanctions are likely to dampen investor expectations for an economic rebound in the second half of this year. The rouble has gapped lower in early trading today with USD/RUB breaking above its 55-moving average for the first time since late April."