A strong yen and tight swap spreads ahead of the Obon summer holidays: The MUFG Global Markets Podcast

USDJPY has recovered to the 106 level so far in August. However, DXY shows that US dollar weakening trends remain intact. Globally, equity prices are firm and market sentiment is unlikely to drive JPY strengthening, but USDJPY could still fall because of seasonal cash repatriation factors. Japanese investors’, as well as Japanese companies’, flows for JGBs and foreign govies tend to be weak ahead of the Obon summer holidays.

In this episode, Takahiro Sekido, Chief Japan Strategist of Global Markets Research, MUFG Bank Tokyo discusses cross border flows, tight JPY swap and basis swap spreads, and updates on his view of the Yen, JPY rates, and JPY cross-currency basis.