The yen’s two-month freefall looks to be over as slowing growth in China and expected damage to the U.S. economy from Federal Reserve rate hikes bolster its haven credentials, strategists say.
The currency jumped 1.3% to 128.34 per dollar Thursday, extending its rebound after last week plummeting to 131.35 against the greenback, its weakest level in around two decades. The move came even as the U.S. currency soared against most peers in haven-inspired trading.
Declines in Treasury yields in recent days have helped weigh on the dollar against the Japanese currency, even if not against other counterparts, while the yen’s haven status appears to also be reasserting itself to some degree as U.S. stocks take a beating. All that adds up to a notable recovery for the yen, which has been among the most battered currencies this year.