Beating up the yen again

27-May (Financial Times) — It’s turning out to be the market’s whipping boy.

After a quiet start, the dollar is once again on the up against the Japanese currency, gaining 0.4% to a new eight-year high for the dollar (and eight-year low for the yen, obviously) of Y123.68. Dollar gains against other currencies have been more muted.

Ian Stannard, a currencies analyst at Morgan Stanley, says this is just the cleanest way to express a ‘strong dollar’ view, particularly as this particular currency pair is so sensitive to shifts in US debt yields. The fact that bets against the yen have been so much less crowded than bets against the euro recently also helps.

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PG View: The weak yen is bolstering the dollar and weighing on gold in the process.