Furthermore, Japan has returned to solid growth in the past three months ended June, with the economy growing at an annualized pace of 1.9%. Economists anticipate the momentum to continue on higher wages and consumer spending unless the U.S. trade spate worsens. Masafumi Yamamoto, chief currency strategist at Mizuho Securities, argued that Japan is relatively insulated from a potential economic slowdown in China, compared to other Asian neighbors and Australia.
“The Japanese yen shines because it’s considered a safe-haven currency,” which outperformed in previous economic crises, Yamamoto told the WSJ.
However, not all are convinced the yen’s strength will last. Adam Cole, chief currency strategist at RBC Capital Markets, warned the yen will weaken as the Federal Reserve continues to raise interest rates while the BOJ sticks with an ultra-easy monetary policy.
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