Yen Hits One-Month High as Tech Rout Deepens
SingTao · 2 SOURCESabout 3 hours ago2 MIN
Summary
The yen strengthened to a more than one-month high in Friday Asian trading as losses in technology shares intensified and investors sought safer assets. The move came alongside gains in Japanese and US government bonds, while gold unexpectedly weakened and briefly fell below US$4,000.
Key Points
- In Tokyo morning trade on Friday, the yen rose as much as 0.4% to 156.08 per US dollar after already gaining 0.9% a day earlier, near levels seen on September 18 when the Bank of Japan raised rates
- Another market update put the yen at 156.95 against the dollar in Asian hours, its highest level since late September, while the yen's Hong Kong dollar rate slipped below HK$5 per 100 yen to about HK$4.97.
- Asian equities followed Wall Street lower, Japanese 10-year government bond prices jumped and their yield fell 10 basis points, while the US 10-year Treasury yield briefly dropped to 4.945%, the lowest since September.
- Commonwealth Bank of Australia strategist Carol Kong said disappointing earnings from major US technology companies had raised doubts about the narrative that AI is driving US growth, making the yen more attractive than the dollar as a haven.
- AGF Investments' Tom Nakamura said fading “US exceptionalism” was prompting dollar selling that offset safe-haven demand for the greenback, while options traders turned more constructive on the yen through one-month dollar-yen risk reversals
Why It Matters
For Hong Kong readers, the move means the yen has become cheaper against the Hong Kong dollar even as it strengthens versus the US dollar, creating a mixed picture for travellers and investors watching Japan-related assets. The next test for markets is whether the yen's rebound can last through next week's policy meetings in Japan and the United States, after which volatility in currencies, bonds and risk assets could remain elevated