The Yen is in standby mode. Overview for 07.10.2020

On Wednesday, USDJPY is slightly rising; market players are monitoring the news but not switching to “safe haven” assets yet.

The Japanese Yen is ready to offer itself to investors as a “safe haven” asset but the demand is rather moderate so far. The current quote for the instrument is 105.72.

The statistics published in the morning showed that the Leading Indicators in Japan went up from 86.7 points in July to 88.8 points in August. It’s not bad but it could have been better. 

It became known yesterday that Japan was planning a series of stress tests for the country’s banking system to see how COVID-19 influenced financial processes. At least 5 strategic and core banks will undergo these tests, and researchers will eventually assess banking revenues very carefully.

Earlier, each of the Japanese banks performed such tests on their own but last December the BoJ along with the FSA decided to test five major banks simultaneously. It’s necessary for putting in the perspective of liquidity operations diversification. This time, the testing scheme will be pretty much the same and the BoJ will continue using international experience.

It’s very important to understand how stable the country’s largest banks are amid the global pandemic of the coronavirus.