What does cross-border flow data from September tell us about COVID-19 risk aversion and changes to the microstructure of the Tokyo market?: The MUFG Global Markets Podcast

COVID-19 patient numbers are on the rise, and the third wave of the COVID-19 pandemic has started to put limits on economic activity. The positive surprise of coronavirus vaccines showing success lasted only a few days, and fears about the growing pandemic have offset the positive news. Looking ahead, the Northern Hemisphere is heading into winter and concerns about other, non-coronavirus illnesses will likely mount. Global investors could focus more on risk aversion. Amidst a dearth of risk takers in the global financial markets, we think that the U.S. current deficit and low U.S. rates will likely support a weaker Dollar.

In this episode, MUFG’s Chief Japan Strategist, Takahiro Sekido, dissects trends in cross-border flows evident in recent data, as well as the Tokyo market’s microstructure amongst Japanese, overseas investors, and the BoJ. He also shares his outlook for Dollar/Yen, Yen swap rates, and Yen basis.