Recent surges in energy prices, largely attributed to conflict in the Middle East, have significantly impacted G10 currency performance, with both the Norwegian Krone (NOK) and Japanese Yen (JPY) emerging as notable beneficiaries. According to Rabobank’s Senior FX Strategist Jane Foley, Norway’s strong oil and gas export position, coupled with a shift to a more hawkish Norges Bank stance, has supported NOK resilience. Foley notes that Norway’s limited domestic vulnerability to the energy crisis and improved terms of trade from higher energy prices underpin the currency’s strength. She anticipates further NOK appreciation versus the Euro and Pound, recommending selling GBP/NOK rallies toward 12.50 over a 6–9 month horizon. On a 1-month view, NOK was the fourth best performing G10 currency after USD, GBP, and JPY, and is expected to continue performing well against many G10 crosses this year [1].
Meanwhile, MUFG’s Head of Research Derek Halpenny highlights that the Japanese Yen was one of the best G10 performers in March, following the US dollar and ahead of the pound. Halpenny argues that the yen has better prospects than the pound for sustaining its performance, citing Japan’s policy measures and a large Strategic Petroleum Reserve release as factors limiting the expansion of Japan’s energy trade deficit. Specifically, Japan announced the release of 80 million barrels from its Strategic Petroleum Reserve, the second largest among OECD countries after the US, as part of a coordinated 400 million barrel release. Halpenny notes that while Japan’s refining capacity has declined, it remains in the top ten globally, and the terms-of-trade shock experienced in 2022 is unlikely to be repeated this time [2].
Both sources emphasize the importance of energy market dynamics and central bank policy responses in shaping currency performance. Rabobank expects EUR/NOK to resume its earlier downtrend and recommends targeting GBP/NOK moves to the 12.50 area, while MUFG sees the yen’s prospects as superior to the pound’s, given Japan’s mitigated energy trade deficit and strategic reserve actions [1][2].
Market implications discussed include continued NOK strength versus G10 crosses and sustained JPY performance, with both currencies benefiting from their respective countries’ energy strategies and policy responses. Forward-looking statements from Rabobank suggest ongoing NOK resilience, while MUFG anticipates the yen will maintain its strong position relative to the pound [1][2].
CONCLUSION
The surge in energy prices has bolstered both the Norwegian Krone and Japanese Yen, with policy responses and energy export positions playing key roles. Analysts from Rabobank and MUFG expect continued strength for NOK and JPY, respectively, as market participants respond to evolving energy dynamics and central bank strategies. The outlook remains positive for both currencies relative to their G10 peers.