The Yen Is Poised to Snap a Nine-Week Losing Streak

The yen ended a nine-week losing run on Friday as risk sentiment deteriorated. At the same time, another Wall Street selloff spurred flight-to-safety bids to the dollar, trading at 20-year highs.

The dollar reclaimed some ground against the yen, closing at 128.9 after falling to a two-week low of 127.5 overnight.

However, the dollar is still down 1.2 percent against the yen this week, its first week of losses since early March. This week, the euro fell 2.6 percent against the yen, its worst drop since early March. The common currency has been a prominent casualty of the “risk-off” mentality.

The benchmark 10-year yield in the United States was 2.8877 percent on Friday, slightly higher but still well below Monday’s peak of 3.203 percent.

Rising US rates during a period when the Bank of Japan intervened to keep Japanese benchmark levels low caused the yen to weaken this year.

Investors continue to flee to safe-haven assets, worried that central bank rate hikes to contain inflation will harm global economic growth.

Asian stocks and U.S. futures rose slightly on Friday, but analysts saw no evidence of a broader comeback.

Euro

The euro was up 0.16 percent at $1.0394, remaining above its 2017 low of $1.034.

Due to the weak euro, the dollar index remained at 104.63, barely below its overnight 20-year high of 104.92.

Sterling fell to $1.2221, damaged by statistics showing Britain’s economy shrunk unexpectedly in March; the Australian dollar fell to $0.6886.

After a week of turbulence, crypto markets were calmer on Friday, as the risk-off sentiment mixed with the stunning fall of the stable coin TerraUSD.

The overall market value of all cryptocurrencies is now $1.2 trillion, less than half of what it was in November, and bitcoin has dropped to as low as $25,401.05 on Thursday, its lowest level since December 28, 2020.

However, bitcoin was up 5.3 percent in early trade on Friday, trading at about $30,400.