The dollar
skidded to its lowest levels against the yen since November 2014 on
Tuesday, as a sell-off in European and U.S. stocks continued into the
Asian session and stoked demand for the perceived safe-haven Japanese
currency.
The dollar was last at 114.85 yen JPY=, down 0.9 percent, after dropping as low as 114.205.
The flight to safety helped the yield on the benchmark 10-year Japanese government bond turn negative for the first time, sending it as low as minus 0.035 percent JP10YTN=JBTC.
JGBs have been on a bull run since the Bank of Japan adopted negative interest rates on Jan. 29, under which banks have to pay interest on certain deposits held at the BOJ. The central bank's announcement initially sent the dollar as high as 121.70 yen, before those gains unravelled.
"In terms of safety, the yen could actually be the most attractive currency right now, which I'm sure the policymakers don't want to hear," said Bart Wakabayashi, head of foreign exchange for State Street Global Markets in Tokyo.
Three-month dollar/yen implied volatility - an indicator of how much currency movement is expected in coming months - jumped as high as 13.120 percent JPY3MO= on Tuesday, its highest since September 2013, as the yen soared.
The flight to safety helped the yield on the benchmark 10-year Japanese government bond turn negative for the first time, sending it as low as minus 0.035 percent JP10YTN=JBTC.
JGBs have been on a bull run since the Bank of Japan adopted negative interest rates on Jan. 29, under which banks have to pay interest on certain deposits held at the BOJ. The central bank's announcement initially sent the dollar as high as 121.70 yen, before those gains unravelled.
"In terms of safety, the yen could actually be the most attractive currency right now, which I'm sure the policymakers don't want to hear," said Bart Wakabayashi, head of foreign exchange for State Street Global Markets in Tokyo.
Three-month dollar/yen implied volatility - an indicator of how much currency movement is expected in coming months - jumped as high as 13.120 percent JPY3MO= on Tuesday, its highest since September 2013, as the yen soared.
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