Flash: Yield spreads favour further weakness in JPY - RBS

FXstreet.com (Barcelona) - Global yields continue to trend higher as investors seek risk appetite strategies, however, the picture is different in Japan, where, as RBS FX Strategist Greg Gibbs notes, the BoJ’s committed QE is keeping a lid on yields.

Key Quotes

"Consequently, JPY’s yield disadvantage is growing and this is likely to see further weakness in JPY. Its near term direction may depend also on degrees of risk aversion and potential for EM market upheaval to drag on investor confidence."

"But EM and Syria fears are not unduly weakening global equities or generating a safe-haven bid for US Treasuries. As such, we expect USD/JPY to be dragged still higher."