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Resurgent Yen at Risk of Bigger Moves Still If 1998 Is Any Guide

  • Currency has recovered more than 10% from its multi-decade low
  • Concern about Covid situation in China has fueled haven buying
Japanese yen coins and banknotes. 

Japanese yen coins and banknotes. 

Photographer: Kiyoshi Ota/Bloomberg
Updated on

The yen is rebounding rapidly after tumbling last month to its weakest level in four decades and there could be more turbulence ahead if the currency echoes its behavior from previous tumultuous episodes.

“The potential for a whipsaw correction similar in magnitude to what we saw in 1998/1999, 2002/2004, 2007/2011 or 2016, is clear,” wrote Kit Juckes, Societe Generale SA’s chief foreign-exchange strategist.