There's plenty of focus on the euro today as it nears a 19-year low but the big story of the FX year in my mind is the yen. We're witnessing a change from a +20-year regime in the forex market of the yen as the predominant safe haven.
USD/JPY is up for five straight days but I really want to focus on the past two. In each of those, global equities have been battered but the pair rose anyway. Just a few years ago that would have been unthinkable.
Now it's routine.
The dollar has surplanted the yen as the global safe haven currency of choice. A big part of that is monetary divergence as the BOJ sticks to yield curve control but there's always been positive carry in the dollar.
If this regime continues to expand it raises the risks of a major dollar overshoot across the board.
