The Japanese Yen was a comparative outperformer on Friday and on course to end the week second placed among major currencies after having largely overlooked a storming rebound in Dollar exchange rates that came amid signs of divergence between the Federal Reserve (Fed) and Bank of Japan.
The Pound-to-Yen exchange rate edged higher on Tuesday making it one of only two pairs to remain in the black on what was a down day for Sterling, although the rally has been slowing for a while and could now be curbed further in the weeks ahead if a turn higher by the Renminbi leads the Japanese Yen to bottom out.
The Japanese Yen remained the worst performing major currency of 2021 on Tuesday but could be set to narrow the gap between itself and comparable rivals over the coming weeks if BMO Capital Markets is right to be concerned about the prospect of a 'short squeeze' playing out this month.
The Japanese Yen outperformed most major currencies on Tuesday following the April policy decision from the Bank of Japan (BoJ) and amid demand for safe-haven currencies, although it may have scope to rise further in the coming weeks according to a range of analysts.
The Japanese Yen was a contender for the top spot among currencies this week by Wednesday having reached oversold levels that have helped put the Sterling-Yen exchange rate onto its back foot, although multiple analysts suggest GBP/JPY still has scope to fall further in the short-term.