TOKYO: The yen rallied against the dollar on Thursday, while emerging currencies were boosted by US Federal Reserve minutes highlighting unease over raising interest rates too soon given global economic weakness.
Huge volatility on equity markets driven by concerns over the global growth slowdown have sent traders scurrying for the Japanese unit, considered a safe bet in times of turmoil.
On Thursday, the yen briefly rose to 109.16 against the dollar, erasing most of the currency's weakness since the Bank of Japan in October 2014 last expanded its vast asset-buying programme.
The Japanese unit, which was at 109.76 on Wednesday in New York, has climbed from more than 114 since the start of the year, when world markets were hammered by worries over global growth.
The euro slipped to 124.40 yen Thursday from 125.10 yen and $1.1397 from $1.1398.
The minutes from the Fed's latest meeting, which suggested broad consensus behind chair Janet Yellen's view that a sluggish global economy requires interest rates to stay low, amplified the greenback's weakness against its Asian peers.
"The market will be reluctant to fully price in rate hikes for 2016 until data become more compelling and global risk sentiment becomes even more elevated," Imre Speizer, an Auckland-based market strategist at Westpac Banking, told Bloomberg News.
"The dollar will be under downward pressure in the near term."
Among higher-yielding emerging units, the oil-linked Malaysian ringgit soared against the dollar after crude prices in US trade climbed above $40 following a large fall in commercial crude inventories.
The ringgit surged 0.47 percent, while the Australian dollar, Indonesia's rupiah, and the Thai baht also booked healthy gains.
Comments
Comments are closed for this article.