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3 Mar 2014
Flas: JPY supported on geopolitical tensions - BTMU
FXStreet (Barcelona) - Lee Hardman, FX Analyst at the Bank of Tokyo Mitsubishi UFJ, suggested the JPY has been benefited from the Russia-Ukraine developments.
Key Quotes
"The yen has continued to strengthen modestly in the Asian trading session reflecting heightened investor uncertainty relating to the latest developments in the Ukraine. G7 leaders and the presidents of the European Council and European Commission have released a statement over the weekend condemning the Russian Federation’s clear violation of the Ukraine’s sovereignty."
"For the time being they have decided to suspend participation in activities associated with upcoming G8 meeting which is scheduled to take place in Sochi in June. They have also supported the Ukraine’s work with the IMF to negotiate a new loan programme and implement required reforms as well as supporting the Ukraine’s right to choose its own future."
"It follows a request on the 1st March from Russian President Putin to the Federation Council which was granted to send troops to the Ukraine. The Ukraine has subsequently called for a mobilization of troops."
"The developments are already encouraging accelerated capital outflows from the two countries, and will have a negative spill over impact upon the surrounding region. The further weakening of the rouble, with the USD/RUB rate rising to a new record intra-day high today just below the 37.0-level, has prompted the Central Bank of Russia to raise its key policy rate by 1.5 percentage points to 7.00%."
"The rouble has already fallen sharply by around 10% against the US dollar in early 2014 increasing upside risks to the CBR’s 5.0% inflation target. The combination of accelerated capital outflows and tighter monetary policy will weigh further upon economic growth in Russia which had already slowed sharply to just 1.3% in 2013."
Key Quotes
"The yen has continued to strengthen modestly in the Asian trading session reflecting heightened investor uncertainty relating to the latest developments in the Ukraine. G7 leaders and the presidents of the European Council and European Commission have released a statement over the weekend condemning the Russian Federation’s clear violation of the Ukraine’s sovereignty."
"For the time being they have decided to suspend participation in activities associated with upcoming G8 meeting which is scheduled to take place in Sochi in June. They have also supported the Ukraine’s work with the IMF to negotiate a new loan programme and implement required reforms as well as supporting the Ukraine’s right to choose its own future."
"It follows a request on the 1st March from Russian President Putin to the Federation Council which was granted to send troops to the Ukraine. The Ukraine has subsequently called for a mobilization of troops."
"The developments are already encouraging accelerated capital outflows from the two countries, and will have a negative spill over impact upon the surrounding region. The further weakening of the rouble, with the USD/RUB rate rising to a new record intra-day high today just below the 37.0-level, has prompted the Central Bank of Russia to raise its key policy rate by 1.5 percentage points to 7.00%."
"The rouble has already fallen sharply by around 10% against the US dollar in early 2014 increasing upside risks to the CBR’s 5.0% inflation target. The combination of accelerated capital outflows and tighter monetary policy will weigh further upon economic growth in Russia which had already slowed sharply to just 1.3% in 2013."