- Reduced haven demand weakens currencies of Japan, Switzerland
- Global markets are on watch amid warnings about volatility
The yen and Swiss franc weakened after a YouGov Plc poll reinforced speculation the U.K. voted to remain in the European Union.
The Japanese currency, traditionally a haven asset, retreated from a 22-month high against the dollar as financial markets and betting odds lean toward victory for “Remain.” The YouGov poll indicated support for remaining part of the 28-nation bloc stood at 52 percent. First results from the vote are expected around 7 p.m. New York time, and the final ones are due at about 2 a.m. on Friday.
“The markets are taking it as a remain win at the moment, and it looks like people are getting rid of their yen,” said Jeremy Cook, the London-based head of currency strategy at World First UK Ltd., an international payments company that had about $9 billion of foreign-exchange turnover in 2015. “The classic havens have had a little bit of a selloff.”
The once-in-a-generation vote is being watched around the world after warnings by the U.K. Treasury, the International Monetary Fund and others that a so-called Brexit risked jobs, incomes, a plunge in the pound and damage to the U.K. economy.
The yen fell 0.5 percent to 106.73 against the dollar as of 5:22 p.m. New York time, after tumbling 1.7 percent Thursday. The franc declined 0.8 percent, while the euro rose 0.1 percent.
“The YouGov poll suggests that this is still very close, so expect liquidity and positioning to continue to dominate price action into tonight,” said Bipan Rai, executive director of foreign-exchange strategy at Canadian Imperial Bank of Commerce in Toronto.