The yen strengthened against other major currencies as investors sought refuge in safe-haven assets. Heightened concerns about global economic growth and ongoing trade tensions fueled risk aversion, driving demand for the Japanese currency.

Factors Contributing to Yen’s Strength

• Global Economic Uncertainty: Concerns about a potential slowdown in global economic growth prompted investors to reduce their exposure to riskier assets.
• Trade Tensions: Ongoing trade disputes between major economies further fueled risk aversion and supported demand for safe-haven currencies like the yen.
• Safe-Haven Status: The yen is traditionally considered a safe-haven currency, attracting investors during times of market turmoil.

Market Impact

The yen’s appreciation impacted various asset classes, including:

• Equities: Japanese equities faced downward pressure as a stronger yen can negatively affect export-oriented companies.
• Bonds: Japanese government bonds (JGBs) experienced increased demand, pushing yields lower.
• Other Currencies: The US dollar and other riskier currencies weakened against the yen.

Analyst Commentary

Analysts noted that the yen’s strength reflected broader market anxieties. They suggested that the yen’s performance would likely remain tied to global risk sentiment and developments in trade negotiations.