Against the background of the coronavirus, we cannot fail to notice the apparent calmness of the Japanese yen. As a safe haven asset, it should rise in price on a larger scale, especially after the stock sell-off we saw last week. Not only is there a case of the virus in Japan, but by comparison, the Singapore dollar will have weakened by 3% against the dollar. We give it a comparison as the currency suffered from the negative effect of the coronavirus.
The information comes from Nikkei Asian Review. It is speculated that in Tokyo, the Japanese authorities are selling yen using money from GPIF, the largest pension fund in the world.
PBOCs are also said to be performing massive market operations to keep the currency calm.
For context, we mention that GPIF is worth 160 trillion yen. When the US-Iran incident happened, the yen did not react as dramatically. If that was not the case then, imagine a drop to 100? The Japanese government would definitely not want this scenario to be fulfilled.
Trader Martin Nikolov