Yen at risk of snap back if policy shift fails to impress

Markets have, somewhat implausibly, welcomed the returned of Prime Minister Abe as signalling something of a fresh start for Japan. But there is a risk that today’s investor optimism will turn to disillusion if the change of tack loudly heralded by Mr. Abe is ultimately seen to have altered little on the ground. For the yen, we suspect this will result in a sudden snap back later in the year that at least partially reverses the slide of the last few weeks.