Yen and Swiss franc would lose out initially in Remain scenario, says Nomura

If UK voters opt to stay in the European Union at Thursday’s referendum, the yen and the Swiss franc would be the initial losers, Nomura said.

"We believe JPY and CHF will be initial losers with EUR appreciation in EUR/USD, but we would not expect momentum to be sustained in the medium term. We believe a Brexit would see JPY and CHF appreciate, while responses by respective policymakers would be important."

"We would also expect USD/JPY to recover to 105.0 swiftly, while EUR/CHF would likely trade around 1.10."

The bank reckons UK voters will choose the status quo and said this would prompt a sterling rally and a rise in short-term yields.

Meanwhile, a vote the other way would prompt large market moves in the opposite direction, the bank said. “We would not expect the Bank of England to deliver a knee jerk monetary policy response to this, but liquidity will be made abundantly available by policymakers in the UK and beyond to contain the shock to global risk appetite.”

In a Remain scenario, it reckons the Norwegian Krone and Swedish Krona would perform well and Scandi currencies would gain ground against the euro and Swiss franc.

“We believe a Brexit outcome would appreciate JPY and CHF, while responses by respective policy makers would be important. EUR might not benefit from negative risk sentiment after a Brexit, and we would expect a Brexit to depreciate EUR/USD.”

Sterling surged on Thursday, hitting fresh 2016 highs against the greenback as the latest polls suggested the Remain camp was taking the lead.

Results of an online poll conducted by market research firm Populus released just after midday showed support for Remain at 55%, with 45% in favour of leaving.

Meanwhile, a phone poll by Ipsos Mori for the Evening Standard found 52% in favour of Remain versus 48% for the Leave camp.