Flash: BoJ and domestic investors to weaken JPY – BTMU

FXstreet.com (London) - Research teams at The Bank of Tokyo-Mitsubishi UFJ, Ltd noted The BoJ’s recent USD funds supply operation, which hit a new record, suggested that Japan has strong investment momentum.

Key Quotes:

“In particular, over twenty banks submitted auction bids. Not only large banks but also regional banks want to have USD-denominated cash from the BoJ”.

“Close to end of fiscal half year, in September, Japanese banks will try to take cash earlier than their schedule amidst the global uncertainty to avoid the funding risk of USD-denominated assets”.

“On this score, their flows will continue to support JPY depreciation”.