Yen’s best week since 2008 crisis hits stocks and dollar
The yen hit an 18-month high on Friday as investors wagered the Bank of Japan might be done adding fresh stimulus to the economy, culminating in a sharp rise on the week that dragged stocks around the world lower.
With Japan on holiday, speculators drove the yen through 107.00 per dollar JPY= for the first time since October 2014. It was around 112.00 before the BOJ unexpectedly held policy steady earlier this week.
Often seen as a sign of broader risk aversion among investors, the strong yen coupled with a decline on Wall Street overnight pushed Asian and European stocks into the red.
Major European stock markets fell more than 1 percent in their biggest fall in over three weeks, while U.S. futures pointed to a lower open on Wall Street ESc1.
“Dollar/yen is not undervalued, and global macro conditions are by no means positive for risk sentiment,” Bank of America Merrill Lynch analysts wrote in a note to clients, adding that a test of 100 yen in the coming months is likely. Read more