Japan's MUFG says the Japanese Yen is likely to remain under pressure against the U.S. Dollar, in part driven by the desire of Japan's investors to seek out global opportunities.
The USD/JPY rate was only fraction higher on Friday but has scope for plentiful gains up ahead and the upside could grow if a possible shift in asset allocation at Japan's Government Pension Investment Fund (GPIF) does materialise, according to analysts at MUFG.
The Japanese Yen is expected to outperform other currencies on a material escalation in tensions between the U.S. and Iran, says Chris Turner, Global Head of Strategy and Head of EMEA and LATAM Research at ING Bank.
The Japanese Yen is vying with the British Pound for the title of worst-performing major currency amidst a broadband pickup in global investor sentiment that creates the conditions that tends to disadvantage this safe-haven currency.
Sterling's rally against the Japanese Yen is being tipped to move higher over coming hours according to fresh technical analysis, but expect markets to stay weary of GBP/JPY ahead of the crunch UK election and a key December 15 U.S. tariff decision.
