The Japanese Yen, playing safe, suddenly rose with the U.S. dollar in Asia on Friday as investors leapt to safe assets following the shooting attack on Japanese prime minister Abe Shinzo.
A government spokesman stated that Abe was shot at a campaign on Friday, his condition unknown.
The Yen rose as much as 0.5% immediately after the news, the Yen rose to 0.5% and settled at 135.60 per dollar.
Bart Wakabayashi, the BM of State Street in Tokyo, “I think the Yen is just playing its safe-haven role. FX market players (are) pretty much ingrained in the way they trade,”
Yen has lately found support as global growth fears rattle markets and from the risk of a central bank policy shift promoting a shift in sentiment on the Yen as It fell to almost 16% on the dollar through the first half of the year.
However, Euro has become an object of public scorn and has been moving towards equality with the dollar. Moreover, investors are concerned that the energy crisis brought on by the uncertainty of gas supply from Russia can send the continent into recession.
This week has seen Euro dwindling to 2%, touching a two-decade low of $1.0140 in Asia trade and lifting the U.S. dollar index to two-decade highs.
An analyst at Citi said, “Europe is exposed to large risks around energy dependency, a cost of living crunch on the consumer, and fragmentation risk. This spells euro/dollar lower,”
Though the Australian dollar slipped on Friday, it appears to fill out a steady week, with help from an infrastructure-led stimulus program announced in China that traders expect to promote raw materials demand.
The Austrian dollar was last at 0.3% lower at $0.6820, while the New Zealand dollar fell by 0.2% to $0.6167.
Despite the British political chaos, pounds have navigated successfully this week. It was down 0.7% but bounced after Boris Johnson’s resignation. It was last bought at $1.2015 and was on course for its best week in more than two years on the ailing Euro.
Investors are concerned about the U.S. economy as energy prices are taking out confidence and growth in Europe, although recent data is much better than expectations.
The dollar has been gallant in emerging markets, sending several Asian currencies to multi-year lows this week.