Editor’s Note
This report from the Tokyo forex session highlights a temporary surge in yen strength, driven by a sell-off in precious metals and resource-linked currencies. The movement moderated with the opening of Chinese markets, underscoring the interconnected nature of regional trading flows.
In the Tokyo morning session, the USD/JPY pair saw strong yen buying/dollar selling, pushing the rate to 156.51 yen, before the decline paused in the high 156-yen range. Similar to the previous day, a sharp drop in precious metals prices pressured resource-linked currencies, leading to a broad yen appreciation driven by weakness in resource currencies. However, as the Chinese market opened, the precious metals sell-off subsided, and yen buying also moderated.
After the pause in the decline, the EUR/JPY pair reduced its losses to the high 184-yen range, GBP/JPY to the mid 212-yen range, and AUD/JPY to the high 108-yen range. The AUD/USD pair weakened to around 0.6897 dollars before rebounding to the mid 0.64-dollar range, erasing today’s losses.