Yen may still have more gains - Nomura

In view of the research team at Nomura, Japanese yen is likely to be the best currency to buy against the dollar in coming months.

Key Quotes

“The yen remains the top-performing G10 currency this year (and over the past month). In recent days, the yen has started to weaken against some key crosses, notably the euro – EUR/JPY touched 115, its pre-US election level before bouncing higher. This suggests that the yen may not be the only or indeed the best currency to buy against the dollar in coming months. However, in the short term, French elections, the possibility of a US government shutdown and still fragile risk appetite (we are still close to risk aversion) suggest that the yen could still perform well. Also, US trade policy will likely continue to focus on US trade partners, including the yen. Both USD/TWD and USD/KRW have fallen to their pre-US election levels, but USD/JPY has yet to (around 105).”