The yen will be in focus this week as traders brace for turbulence amid ongoing uncertainty around the Russia-Ukraine war and the path of global central bank policies.
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The Japanese currency has proven less reliable as a go-to global haven during the recent crisis, becoming instead a barometer of what investors are thinking in terms of interest rates.
With the Federal Reserve signaling it will be lifting borrowing costs further and faster, and the Bank of Japan remaining steadfast in keeping its stance quite easy, the yen has collapsed.
Traders will get more insight into the Fed’s thinking this week, with officials including Philadelphia Fed President Patrick Harker and Atlanta Fed president Raphael Bostic due to speak.
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Even with the fallout from Russia’s Ukraine invasion blighting global markets and weighing on risk appetite, the yen has fallen close to 6% this year. It’s the worst performer among Group-of-10 peers, and last week hit its weakest level since 2015. And there may be worse to come still, if the bears are right.
Japan’s currency was little changed at 121.98 per dollar as of 6:32 a.m. in Sydney, following three consecutive weeks of decline. That comes after officials said in-person talks between Ukrainian and Russian negotiating teams will resume this week.
