FXStreet (Delhi) – Lee Hardman, Currency Analyst at MUFG, notes that yen has strengthened modestly in the Asian trading session supported by a pick-up in safe haven demand as global equity markets and the price of crude oil have come back under renewed selling pressure early this week. Key Quotes “The initial investor enthusiasm which greeted the BoJ’s decision late last week to implement negative rates is fading. However, the impact on global yields is proving more persistent which continue to adjust lower reinforced by a safe haven bid. Global investor risk sentiment continues to remain fragile at the start of this year reflecting heightened concerns over slowing global growth especially in China and the potential negative impact from the Fed’s decision to begin tightening monetary policy. The incoming economic data from the major economies has been surprising to the downside on balance providing no reassurance to global investors. The current environment continues to favour the safe haven currencies of the yen, euro and US dollar. The yen would be even stronger without the BoJ’s recent decision to implement negative rates which has potentially undermined its safe haven appeal. BoJ Governor Kuroda has been speaking in parliament overnight following the negative rate announcement. He stated that he was uncomfortable with speculation that the BoJ was out of ammunition when considering whether to ease policy further. He provided reassurance that was not the case and that the BoJ will devise new tools if needed. The three-tier current account balance system which accompanied the BoJ’s decision to introduce negative rates highlights that the BoJ is still able to devise new innovative ways to help it reach their inflation goal. The decision has also helped to reinforce the credibility of the BoJ’s inflation goal silencing doubts that it was reluctant to address building downside risks to the inflation outlook. However, he added that it was not appropriate to say in advance what additional easing measures may be necessary in the future. He repeated as well that he believes that the market reaction to China concerns is excessive so far this year.” For more information, read our latest forex news.