Yen Surges as Traders Wager China’s Slowdown Harms Global Growth

  • Japan’s currency rebounds from the lowest level since July
  • Deutsche Bank sees ‘plenty of scope’ for extended advance

China Exports Fall Most in 7 Months

The yen climbed after a report showing the weakest Chinese exports since February dimmed the outlook for global economic growth and fueled refuge demand.

Japan’s currency rose against most of its 31 major counterparts on the latest signs of a slowdown in the world’s second-largest economy. Deutsche Bank AG strategists said in a note there’s "still plenty of scope for strength" in the yen.

"Subdued Chinese data is contributing to an overall cautious market mode, which is in part contributing to the yen’s strength," said Eric Viloria, a currency strategist in New York at Wells Fargo Securities LLC.

Viloria forecasts the yen will climb to 102 per dollar by year-end.

The yen has strengthened against all Group-of-10 currencies this year as Japan, a traditional haven, has benefited from global economic and political shocks. Speculation has also mounted that the Bank of Japan is running out of policy ammunition in its quest to spur inflation through unprecedented monetary easing.

The yen advanced 0.7 percent to 103.51 per dollar as of 11:17 a.m. New York time, after touching the weakest level since July 29. It added 0.3 percent to 114.31 per euro.

"The rally is still young," Deutsche Bank strategists led by George Saravelos wrote in a note to clients last month, adding that the currency will strengthen to the low 90s per dollar by year-end.

China’s yuan fell to a six-year low as the nation’s exports fell 10 percent from a year earlier in September, the customs administration said Thursday. Imports declined 1.9 percent .

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