Yen lacks fundamental strength, says IMF
IMF recently told the press they fail to see any underlying fundamental factors giving the Yen any strength. According to International Monetary Fund, the current value of the Yen reflects long-term fundamentals. So basically, they mean that the Yen is still overvalued against USD and rest of the G7 countries.
Surprising G7 intervention against Yen
Last week, seven central banks from the G7 countries joined together in an effort to weaken the Yen. After the earthquake, the Japanese Yen has been traded stronger, in contrast to what you would expect.
Currency traders also claim that the Yen strengths is partly due to corporations, insurance firms and private people sending money back to Japan.
What do investors buy in Japan right now?
It seems like Japanese investors mainly focus on the bond market, seeing it as a safe bet at the moment.
Foreign investors are instead buying Japanese stocks, for a record 891 billion yen last week. If the foreign investors with Warren Buffet in the lead are too early or not are yet hard to predict. But it’s not impossible that nuclear issues and other factors may affect the stock market downwards in the coming weeks.
