It goes without saying that JPY crosses have been bid this week. Especially AUD/JPY and GBP/JPY……EUR/JPY has been somewhat of a laggard. Most point to the Japanese PM resignation and the likely (then confirmed today) appointment of FinMin Kan who is known for wanting a weak Yen in order to fight deflation.

Whilst the chair swapping in Japanese politics can be put down as a reason for strength on the crosses it would be a stretch to say it is the main reason.

Every June players drag old that old chestnut – carry trades…..if nothing much is going to happen over Summer may as well be long carry trades. Adding to the carry demand has been a couple of large Uridashi bonds announced by Nomura for Japanese retail investors. Today Nomura confirmed that they had issued an AUD1.0bln bond and a NZ280mln. Little wonder AUD/JPY recovered so strongly today.