The yen surged 0.8% to 156.86 per dollar, its strongest level since late September, as global equities selloff boosted demand for safe-haven currencies. The move came amid disappointing technology and AI-related earnings, escalating Middle East tensions, and rising oil prices. Treasuries soared and the dollar edged lower. OCBC FX strategist Sim Moh Siong noted that AI jitters drove US yields lower, boosting USD/JPY.
The Swiss franc also gained 0.4% against the dollar, while the euro struggled with French debt stress and elevated energy prices. Bank of America strategist Alex Cohen observed that traditional risk-off patterns saw the yen and Swiss franc outperforming the euro. Options traders showed optimism in one-month dollar-yen risk reversals. However, Sumitomo Mitsui Banking Corp's Hirofumi Suzuki cautioned that upcoming central bank meetings and midterm elections may prevent sustained yen appreciation despite recent gains.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing