Is the USD Benefiting As the Only Safe Haven, After Gold and JPY Lost the Status?

There’s lots of attention on the Euro today as it nears a 19-year low, with EUR/USD falling below parity today and the chances are that it will stay there for a period this time, after climbing back up last time. But the big story of the FX year in my mind is the Yen. We’re witnessing a change from a +20-year regime in the forex market of the JPY as the predominant safe haven.

USD/JPY is up for five straight days but I really want to focus on the past two days. In each of those, global equities have been battered but the pair rose anyway, which means that the JPY has been declining as the sentiment turned negative in financial markets. Just a few years ago that would have been unthinkable.

Now it has become routine. The dollar has supplanted the Yen as the global safe haven currency of choice. A big part of that is monetary divergence as the BOJ sticks to yield curve control but there’s always been positive carry in the dollar. If this regime continues to expand it raises the risks of a major dollar overshoot across the board.   

USD/JPY Daily Chart – Breaking Above the 50 SMA

USD/JPY gaining as the Yen declines, despite the negative risk sentiment in markets

Check out our free forex signals
Follow the top economic events on FX Leaders economic calendar
Trade better, discover more Forex Trading Strategies
ABOUT THE AUTHOR See More
Skerdian Meta
Lead Analyst
Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.
Related Articles
Comments
0 0 votes
Article Rating
Subscribe
Notify of
0 Comments
Oldest
Newest Most Voted
Inline Feedbacks
View all comments

HFM

Doo Prime

XM

Best Forex Brokers