Yen rallies as global tech rout sparks flight to safety
Asian stock markets follow Wall Street lower as Japanese currency gains against the dollar
On October 22, the Japanese yen surged against major currencies, reaching its strongest level in over a month. This surge occurred as global risk aversion drove investors to seek safe havens. The yen rose 0.8% to 156.86 per US dollar, gaining 0.9% against the euro. The increase in demand for sheltered assets was fueled by disappointing technology and artificial intelligence-related earnings, as well as heightened Middle East tensions and rising oil prices.
Meanwhile, US Treasury yields fell, and the dollar itself weakened. OCBC FX strategist Sim Moh Siong suggested that AI-related concerns in the US had dragged down US yields, potentially contributing to the yen's strength. Other safe-haven currencies, such as the Swiss franc, also appreciated against the dollar. Bank of America strategist Alex Cohen noted that foreign-currency markets were displaying conventional risk-off behavior, with the yen and Swiss franc outperforming while the euro underperformed.
Options traders displayed optimism about the yen through risk reversals, indicating expectations of near-term gains. However, analysts cautioned against interpreting the recent strength as a sustained trend, citing upcoming central bank meetings and the upcoming midterm elections as factors that might limit the yen's continued appreciation.
Written by urgent.news from Straits Times Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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- Yen jumps as traders seek safety amid global flight from risk straitstimes.com
