Deutsche Bank Analyst Compares Yen to Turkish Lira and Argentine Peso
The Japanese yen has been a safe-haven currency for decades, but a Deutsche Bank analyst has recently compared it to the Turkish lira and Argentine peso. The comparison has raised eyebrows in the financial world, as the yen is typically seen as a much more stable currency than the other two.
Yen’s Recent Performance
The yen has been on a roller coaster ride in recent months. After hitting a three-year high in October, it has since dropped more than 5% against the US dollar. This is a sharp contrast to its performance in the first half of the year, when it was one of the best-performing currencies in the world.
Deutsche Bank Analyst’s Comparison
Deutsche Bank analyst George Saravelos recently compared the yen to the Turkish lira and Argentine peso. He argued that the yen is no longer a safe-haven currency and is now more akin to the other two currencies, which are both highly volatile.
Reasons for the Comparison
Saravelos cited several reasons for his comparison. He noted that the Bank of Japan has been engaging in quantitative easing, which has weakened the yen. He also pointed to the fact that the Japanese government has been running large budget deficits, which has put downward pressure on the currency.
Reaction to the Comparison
The comparison has been met with some skepticism in the financial world. Many analysts argue that the yen is still a safe-haven currency and that its recent performance is just a temporary blip. They point to the fact that the Japanese economy is still relatively strong and that the government has been taking steps to reduce its budget deficit.
Implications of the Comparison
The comparison has implications for investors. If the yen is indeed becoming more like the Turkish lira and Argentine peso, then it could be a risky investment. Investors may want to consider diversifying their portfolios to include other currencies that are more stable.
The Future of the Yen
It remains to be seen whether the yen will continue to weaken or if it will regain its status as a safe-haven currency. In the short term, the currency is likely to remain volatile as the Bank of Japan continues to engage in quantitative easing and the government continues to run large budget deficits. In the long term, however, the yen could regain its status as a safe-haven currency if the Japanese economy continues to strengthen and the government takes steps to reduce its budget deficit.