Forex Flash: Bourgeoning JPY macro theme unlikely to wane anytime soon – Deutsche Bank

Regarding the communiqué itself, last week the G20 pledged to "move more rapidly toward more market-determined exchange rate systems and exchange rate flexibility to reflect underlying fundamentals". Seeking to downplay the notion of currency wars, the G20 added that "We will refrain from competitive devaluation. We will not target our exchange rates for competitive purposes".

On fiscal consolidation, the G20 said that "credible medium-term fiscal consolidation plans will be put in place and implemented, taking into account near-term economic conditions and fiscal space where available". Speaking after the release of the communiqué, Japanese finance minister Taro Aso defended his government's economic policies, saying that "Abe's administration is doing its utmost to escape from deflation and we have gained a certain understanding (at the G20)". According to Macro Strategy Analysts J. Reid and C. Tan at Deutsche Bank, “the JPY has been one of the most watched macro themes this year and will probably continue to be so for some time yet.”