The yen strengthened for a second day while the Australian and New Zealand dollars weakened as a regional stock market slump boosted demand for safer assets.
The Aussie dropped for the first time in six days after the Reserve Bank of Australia kept interest rates at a record low and said it will weigh the impact of recent global financial turbulence in deciding whether to ease policy further.
Asian equities fell, halting a four-day gain, while oil declined amid fading optimism sparked by last week’s surprise Bank of Japan expansion of stimulus.
“The safe-haven yen has strengthened and globally linked currencies such as the Australian dollar and New Zealand dollar have declined as regional equity markets fall,” said Joseph Capurso, a currency strategist at Commonwealth Bank of Australia in Sydney. “The RBA appears a little more cautious on the global economy.”
The yen strengthened 0.3 percent to 120.65 per dollar as of 6:48 a.m. in London after appreciating 0.1 percent on Monday. Japan’s currency rose 0.2 percent to 131.52 per euro. The shared currency climbed 0.1 percent to $1.0900.
“The BOJ has made it difficult to buy the yen, but people are also calming down” after the central bank announced negative interest rates last week, said Jun Kato, a senior fund manager in Tokyo at Shinkin Asset Management.
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