Yen Becomes a Favorite Safe Haven as Risk-Off Deepens
The yen strengthened and led the movement of safe-haven assets as the risk-off wave deepened, following a sharp sell-off in stocks and commodities that continued overnight. This condition prompted investors to move out of riskier currencies and back into assets perceived as safer.
In the forex market, USD/JPY fell 0.3% to 156.60, after closing higher for five consecutive days on Thursday. Meanwhile, the Australian dollar weakened 0.4% to 0.6900, with additional pressure related to large options activity, said to be met by leveraged sellers, according to Asia-based FX traders.
Meanwhile, the Bloomberg Dollar Spot Index rose 0.1% and has the potential to record a third consecutive day of gains. US Treasury bond yields were seen to be mixed but relatively stable, indicating that the market is still taking a wait-and-see approach while assessing the direction of future risk.
On the commodity side, silver was under pressure again: its price fell as much as 9%, extending its nearly 20% decline on Thursday. This decline was exacerbated by signs of weakness in the US labor market, which deepened the retreat from stocks and commodities and increased speculation that the Federal Reserve could take further policy easing steps.
"Market conditions are extremely tense right now, with the yen still being sought after despite the uncertainty surrounding this weekend's election," said Nick Twidale, Chief Market Analyst at AT Global Markets. He added that investor funds are now more focused on the immediate risks—whether metals and stocks can find a bottom—so safe-haven currencies tend to remain sought after.
On the stock market, S&P 500 mini futures fell 0.5%, while Japan's Nikkei 225 index briefly fell as much as 1.6%. Elsewhere in the G10, EUR/USD was steady at 1.1779 and GBP/USD was flat at 1.3527.
Among other commodity currencies, NZD/USD fell 0.1% to 0.5942, reinforcing signs that investors are still opting for defensive action amid high volatility.
Source: Newsmaker.id
