The yen has been soaring for a few minutes and is the best performing global currency.
The Swiss National Bank’s surprise 50 basis point hike today singled out Japan as the only adherent to extremely accommodative monetary policy. This has made the country a key battleground and the site of Soros-style betting against Japanese bonds.
USD/JPY is down 110 pips to 132.75 on the second day of decline. The pair hit a 24-year high earlier this week and has been one-sided since early March.
The continued rout in risk assets and rising global inflation are breathing some life into the yen, but the SNB’s decision adds fuel to the fire. The short-yen is a crowded trade and the BOJ decision comes on Friday. Eamonn has a preview here.
If we get any surprise – or even a hint of change – then we could see a quick yen retracement.