August favours JPY crosses on seasonal patterns – ANZ

August favours JPY crosses on seasonal patterns – ANZ
FXStreet (Mumbai) – FX Strategists at ANZ noted a strong case in favour of JPY and its crosses, citing strongest seasonal patterns emerge in USD/JPY during the eight month of the year.

Key Quotes:

“Among G10 currencies, the strongest seasonal pattern during the month of August is in USD/JPY, GBP/USD, and AUD/USD.”

“Since 2000, USD/JPY has fallen (ie JPY appreciated) by an average of 1.1% in 10 out of the last 15 years. GBP/USD and AUD/USD have fallen by the same directional frequency for an average spot decline of 0.9%.“

“The most notable seasonal patterns are found in the JPY crosses. In fact, JPY has a tendency to outperform other currencies during August with surprising regularity. “

“Gains range from 1.1% (against CNY) to 2.7% (against INR). The directional frequency has also been strong with the lowest at 60% (ie 9 increases in the last 15 years – against CNY and IDR) and the highest at 87% (ie 13 increases out of 15 – against PHP).”

“The reason for JPY strength in August is due to a rise in Japanese investment income repatriation flows from their offshore debt holdings, principally those issued by the US government. “

“In August this year, interest payments from US government debt will total USD43bn, of which Japanese investors are the second largest foreign holders at 9% of the total.”

“August also happens to be the quietest period in the FX market due to the northern hemisphere summer, which amplifies the flow effect.”
For more information, read our latest forex news.
August favours JPY crosses on seasonal patterns – ANZ
Source: FXStreet