Last Friday’s very weak German Manufacturing Purchasing Managers’ Index data was another blow to the global economic backdrop, with concerns throughout this year of a global slowdown in China, through Asia Pacific and increasingly also in Europe.
This has seen riskier asset classes come under negative forces over the past week, with global equity averages suffering notable corrective losses as we have shifted to a “risk off” phase.
A very dovish Federal Reserve at their 20th March Meeting has seen longer term US Treasury (UST) yields plunge back lower and an inversion of the 3 months-10yr sector of the UST yield curve. This yield curve inversion is often seen as a sign of a future recession.
In the Forex space, the main beneficiary of this shift to a “risk off” scenario has been the Japanese Yen as a safe haven.
Here we focus on USDJPY: https://www.fxexplained.co.uk/forex-articles/current-market-analysis/yen-stays-strong-in-risk-off-scenario/