Three reputable banks of Japan at the same time predict that next year will be fruitful for the Japanese currency, which will extract the greatest benefit from the political risks of Europe. In addition, factors such as uncertainty about the actions of the ECB, concerns about the slow development of the US economy and the expected pause in tightening the Fed policy make the yen the most attractive among the three main currencies.
According to Mizuho Bank estimates, in the new year, the euro against the yen may sink by 8% compared with current marks and lock in at the level of 118.00.
According to market strategists Mizuho, the yen in 2019 plays the role of the beneficiary, because now its position is the most unsightly compared to its main competitors. There will be no sensation, even if the rate drops to 115 yen per euro, which is 10.5% below the current levels, it was emphasized at the bank.
Since January of this year, the euro area currency has fallen by 5% against the Japanese yen. If in early February, an increase to 137.5 yen per euro was recorded, by the end of May, the exchange rate fell from an annual peak of 9.4%, testing the annual minimum at 124.60.
The yen takes the lead from the dollar.
The dollar went up in pairs with the euro at 5.4% in the past year. Attempts to grow the euro were unsuccessful. The maximum rate of EUR / USD was recorded in mid-February (1.2555), then the pair began to depreciate. As of November 11, it fell to an annual minimum of 1.1215, which is more than 10% below the February peak.
Next year for the dollar is unlikely to be successful, as investors are laying on the fact that the Fed will suspend the rate increase process, which, as is widely discussed by experts, has exhausted itself. Currency strategists from Daiwa Securities expect investors to lower their appetite for risk and the EUR / JPY rate to fall to 120. At the same time, it is not necessary that the euro be strong against the dollar. The largest movements among the three major currencies are forecasted in EURJPY.
Yen: own reasons for growth
Toward the end of next year, the euro may depreciate to yen to 121. However, the national currency of Japan will occupy winning positions not only due to the weakness of competitors, it has its own reasons for growth, said Mitsubishi UFJ Bank.
At the beginning of next year, trade negotiations will take place between the United States and Japan, which will certainly attract the attention of markets. Alert about this discussion will trigger the demand for safe-haven assets, and the yen is more likely to have the advantage. The positive moment for the Japanese currency is also the predicted changes in the policy of the Central Bank of the country and the growth of rates amid falling inflation expectations.
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