Thursday, 10 September 2015 11:53
TOKYO: The yen picked up in Asian currency trading Thursday as traders moved into safer assets after regional equity markets retreated and investors look to next week’s Federal Reserve policy meeting.
In Tokyo, the dollar edged lower to 120.48 yen from 120.54 yen in New York, after moving above the 121 yen level earlier Wednesday.
The euro was slightly weaker at 135.03 yen against 135.05 yen, while it ticked up to $ 1.1208 from $ 1.1205.
Investors tend to buy Japan’s currency as a safe-haven during times of uncertainty or turmoil.
“It’s yen buying on risk aversion,” Kengo Suzuki, chief currency strategist at Mizuho Securities, told Bloomberg News.
“The Nikkei’s big and extreme price swing shows markets are far from stabilising and regaining calm, even when an excessively pessimistic mood has subsided somewhat.”
Tokyo’s Nikkei 225 index dropped nearly three percent by the lunch break.
Early selling spread through other regional exchanges, with Hong Kong and Shanghai seeing hefty losses, despite Chinese Premier Li Keqiang the day before seeking to shore up confidence in the government’s handling of an economic crisis that has sent global markets plunging.
A mixed reading on Chinese inflation Thursday kept Asian equities traders on edge in fresh volatility, as markets retreated from a two-day rally.
Thursday’s losses follow thumping gains across the world over the previous two days — including a 7.7 percent jump in Tokyo Wednesday — which were helped by Chinese moves to bolster its economy.
Meanwhile, a report showing a tighter US jobs market increased speculation the Fed will pull the trigger on a rate rise at next week’s policy meeting.
Higher rates tend to attract investors in search of better returns to dollar-denominated assets, pushing the unit up.
In other Asia-Pacific currency trade, the Australian dollar fell back to six-year lows against the greenback, buying 69.64 US cents, down from 70.45 cents in Tokyo Wednesday.
