Hot news – The Japanese yen and the U.S. dollar rose on Thursday as a sell-off in global stocks dented risk sentiment.
The USD/JPY pair was down 0.2% by 12:20 AM ET (04:20 GMT). The Japanese yen is widely considered a safe-haven asset during times of uncertainty.
The gain in yen came as the NASDAQ fell 4.4%, the Dow lost 2.4% and the S&P 500 lost 3.1% overnight in the U.S.. Asian stocks also traded lower, with Japan’s Nikkei 225 down more than 3%.
“I won’t be surprised to see the dollar/yen fall below 112 as U.S. yields have cooled off to 3.1 percent from their recent peak and volatility in developed markets has picked up,” said Rodrigo Cartel, senior currency strategist at NAB.
Meanwhile, the dollar remained near nine-week highs against other currencies on Wednesday as the U.S. dollar index gained 0.4% to 96.06. U.S. 10-Year Treasuries yield fell the most since May to 3.1%.
Yields have been on an uptrend recently thanks to a hawkish U.S. Federal Reserve as it looks to raise interest rates by another 25 basis points in December.
The USD/CNY pair was little changed at 6.9443 as the People’s Bank of China (PBOC) set the yuan reference rate at 6.9409 vs. the previous day’s fix of 6.9422.
The AUD/USD pair and the NZD/USD pair both slipped 0.1%.
Elsewhere, the euro was at its lowest level since August 17, after data showed that euro zone private sector activity grew at the slowest pace in more than two years in October, increasing concerns over the economic impact of trade wars.
Worry over Italy’s budget also remained in focus after the European Union took the unprecedented step of rejecting Rome’s 2019 draft budget on Tuesday, amid concerns over the impact of increased spending on already high national debt levels.