Flash: Continued reluctance towards EUR diversification? – UBS

FXstreet.com (New York) - For over a decade, reserve managers gradually sold dollars to beef up their euro holdings – that process stopped soon after Greece defaulted, notes Research Analyst Gareth Berry at UBS.

According to Berry, “We suspected today’s data will show lingering concerns here, and an ongoing reluctance to restart the diversification program into euros.”

Has the yen’s reserve status been harmed by extreme volatility in JGBs and in the yen? It’s probably too soon to say with certainty. Today’s data represented a snapshot on March 31st – after BoJ Governor Kuroda was appointed, but before his first policy decision. That’s after the yen sold off, but before JGB volatility surged.