The yen rose, heading for its biggest two-day gain in more than a week, as Britain’s vote last month to leave the European Union sent investors seeking haven assets and pushed the pound to its weakest level in more than three decades.
Japan’s currency climbed at least 0.5 percent against all 16 of its major counterparts, while the pound surpassed lows reached in the immediate aftermath of Britain’s June 23 referendum. M&G Investments suspended a 4.4 billion-pound ($5.7 billion) real-estate fund on Tuesday, following on the heels of Aviva Investors and Standard Life Investments after a flurry of redemption requests.
“The yen is taking the brunt of the pound selling,” said Takuya Kawabata, an analyst at Gaitame.com in Tokyo. “It’s a risk-off market triggered by the pound. We need to continue to remain wary of risk aversion prompted by the U.K.”
The yen rose 0.6 percent against the dollar to 101.18 as of 9:02 a.m. in Tokyo Wednesday, after gaining 0.8 percent Tuesday. The pound declined 0.4 percent to $1.2977 after hitting a 31-year low of $1.2950. The euro was little changed at $1.1066.
Japanese Prime Minister Shinzo Abe said on June 28 that the government will carefully watch currency movements and that he asked Bank of Japan Governor Haruhiko Kuroda to co-operate with Group-of-Seven nations to secure market liquidity.
“The yen gained its ascent in anticipation of further declines in Japanese stocks and after breaking the June 27 low of 101.41,” said Toshiya Yamauchi at Ueda Harlow Ltd., a margin-trading services provider in Tokyo. “Risks to the yen’s further upside are growing and it may test the 100 level to see the authorities’ response.”
Japan’s Topix index of shares fell 2 percent.
By: Chikako Mogi (Bloomberg) .
Photo: CNBC.
Review: Emerging Market Formulations &
Research Unit, FLAGSHIP RECORDS.
For The #FacebookTeam