The yen headed for its first weekly advance versus the dollar since August as stock declines and signs of a global slowdown boosted demand for haven assets.
Japan’s currency was set for gains against most of its 16 major peers this week as investors pushed back bets for when the Federal Reserve will raise interest rates. The euro was poised for a third weekly decline against the yen after European Central Bank President Mario Draghi pledged to expand stimulus measures if needed. Australia’s dollar fell for a second day, while the South Korean won gained.
“People have decided that the reason the Fed might be lower for longer on rates is because the global economy is slowing and equities have dumped on that,” said Ray Attrill, the global co-head of currency strategy at National Australia Bank Ltd. in Sydney. “The yen will continue to draw safe-haven support.”
The yen traded at 107.81 per dollar as of 11:24 a.m. in Tokyo from 107.84 yesterday, when it touched 107.53, the strongest since Sept. 17. Japan’s currency was poised for a 1.8 percent weekly gain, the biggest since the period ended March 14. It was little changed at 136.97 per euro. The 18-nation currency rose 0.1 percent to $1.2704.
The Australian dollar weakened 0.1 percent to 87.72 U.S. cents from the New York close. The MSCI Asia Pacific Index of shares declined 1.2 percent, following a 1.2 percent drop in the MSCI World Index yesterday.
Source: Bloomberg (10 Oct 2014)
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