Yen Weakens as Stock Gains Spurs Risk Appetite, Boosting Aussieby
The yen weakened, paring a quarterly advance, as gains in Asian stocks reduced demand for haven assets.
Japan’s currency headed for its first decline versus the dollar this week on Wednesday after shares advanced in Asia, following gains in New York. Australia’s dollar, which has led declines among developed-market currencies this quarter, paced gains Wednesday with its New Zealand peer. The yen has advanced the most among its major counterparts in the past three months as a China-led selloff erased close to $10 trillion in value from global equities.
“Yesterday, the yen strengthened beyond the mid-119 level to the dollar as stocks sold off, so today, with stocks rebounding, there’s an unwind of risk-off trades,” said Akira Moroga, manager of currency products at Aozora Bank Ltd. in Tokyo.
The yen fell 0.1 percent to 119.91 per dollar at 10:32 a.m. in Tokyo, following a 0.7 percent rally in the previous two days. The Aussie rose 0.3 percent to 70.05 U.S. cents, while the kiwi jumped 0.3 percent to 63.67 U.S. cents.
The MSCI Asia Pacific Index of stocks advanced 1.3 percent, snapping a two-day, 3.2 percent drop.
Since June 30, the Japanese currency has climbed 2.2 percent against the greenback, while Australia’s dollar slumped 9.1 percent, and New Zealand’s kiwi dropped 5.9 percent.