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Forex – Yen Surges on Safe-Haven Demand; U.S. Dollar Falls

2 Mins read
imageForexMar 09, 2020 01:17AM ET

(C) Reuters.

By Alex Ho – The Japanese yen surged against the U.S. dollar on Monday in Asia as stock markets were in a sea of red amid plunging oil prices.

The USD/JPY pair lost 2.4% to 102.79 by 12:01 AM ET (04:01 GMT). The yen jumped more than 3% earlier in the day and was near its highest level in three years.

Zach Pandl, the Goldman Sachs’s co-head of global foreign exchange and emerging market strategy, told Bloomberg TV last week that the yen could rally as far as 95 if global markets stay disorderly for the next couple of months.

The worsening coronavirus outbreak and a collapse in oil prices were cited as major tailwind for the safe-haven currency today.

Oil prices saw a whopping 30% losses earlier in the day after Saudi Arabia, the world’s top oil exporter, vowed to slash its prices while raise its production level significantly.

Meanwhile, the continuing spread of the new coronavirus also prompted investors to sell riskier assets and a scramble into safe-haven assets. Global confirmed cases increased to almost 107,000 as of Sunday, according to the latest figures from the World Health Organization.

Citing an unnamed senior Japanese finance ministry official, Reuters said Japan authorities sees “nervous moves” in the currency market and that officials from the Bank of Japan and the financial watchdog is scheduled to discuss financial markets.

Asian markets traded sharply lower today, with Australia’s S&P/ASX 200 down more than 7%, while other major indices also plunging between 4 to 6%.

Meanwhile, the U.S. Dollar Index that tracks the greenback against a basket of other currencies was down 0.8%.

The AUD/USD pair lost 1.5% to 1.3639. The NZD/USD pair slid 1.2% to 0.6274.

The USD/CNY pair gained 0.2% to 6.9382.

Forex – Yen Surges on Safe-Haven Demand; U.S. Dollar Falls

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