03.06.201606:19:00UTC+00Yen Topples Brazilian Real As Best Performer Ytd

Yen is up against dollar, for the fourth consecutive day and it is the best performer so far this year. After losing its crown for a brief period, it is back proving that 2016 is the year of the Yen.

It retreated to trade as low as 111.3 per dollar, before G-7 meeting and gained its groove after Japanese Prime Minister Shinzo Abe announced that he will postpone the introduction of consumption tax hike from eight percent to 10 percent till October 2019.

Yen is currently trading at 109 per dollar, up close to 10 percent, this year so far. Bank of Japan (BOJ), introduced negative rates this year but that failed to weaken Yen. After temporary setback, Yen roared to strength from 121 to trade lower.

Slowdown in global economy and building up of risk in China’s financial system have pushed investors to the safety of Yen and we expect it would continue to do so.

Our long call in Yen (Sell USD/JPY @119 with stop loss around 125 and targets at 98) remains active, only that we have shifted stop loss to 120 and targets to 90.

Yen is being bought as protection against financial turmoil and in expectations that Bank of Japan (BOJ) is running out of tools.