Lessons from the 2020 COVID-19 Pandemic and the 2021 JPY Cross-Asset Outlook: The MUFG Global Markets Podcast

2020 was altered in previously unimaginable ways by the COVID-19 pandemic. In March, global financial markets became extremely volatile in reaction to the huge disruption in the real economy. Across the globe, governments and central banks responded with coordinated policy measures that boosted both share and bond prices, as well as basis arbitrage trading of key currencies, which kept FX spot rates in tight ranges. The Bank of Japan responded to the crisis by aggressively supplying funds to the market and buying corporate bonds and ETFs. The USD supply operations helped to stabilize USD funding for Japanese investors, while the corporate bond and CP buying supported the credit market. These moves helped to quell risk contagion for global financial markets, and the Tokyo market is fairly calm as 2020 draws to a close. Compared to previous crises, like the late 1990s and 2008, JPY cross-asset pricing was very different this time.

In today’s episode, MUFG's Chief Japan Strategist, Takahiro Sekido, looks back on 2020 and shares his outlook for 2021. He also discusses the lessons learned from the COVID-19 crisis and his outlook for Dollar/Yen, Dollar/Yen basis, and Yen rate.