HONG KONG Reuters held the yen's overnight gains on Friday after falling U.S. yields and market jitters propped up the Japanese currency while another Wall Street selloff drove flight-so safety bid to dollar, which remains near 20 year highs.
The yen was at 129.14 per dollar on Friday morning, softening on the day after it reached a two-week peak of 127.5 overnight.
Thursday's 1.2% decline for the dollar yen was its biggest daily decline this year. The euro yen cross fell 2.5%, its biggest daily percentage fall since 2016 as the common currency was a victim of the risk off mood.
The yen is perhaps the most obvious signal of a shift from a world where yields were dominant and risk resilient yen negative to a world this week where risk appetite drives yields lower yen positive, according to Alan Ruskin, macro strategist at Deutsche Bank.
The U.S. 10 year yield was 2.8822%, down from Monday's high of 3.203%.
The yen was softer this year as the rising U.S. yields at a time when the Bank of Japan was intervening to keep Japanese benchmark yields pinned down.
Inflation and central bank rate hikes are a concern that investors are going to hit global economic growth, while MSCI's gauge of stocks fell to its lowest overnight since November 2020, which is why investors are moving towards safe-haven assets.
After the Fed raised its benchmark overnight interest rate by 50 basis points last week, the largest hike in 22 years, investors are assessing how aggressive the central bank policy path will be.
According to CME's FedWatch Tool, expectations are priced in for another hike of at least 50 basis points at the central bank's June meeting.
The euro was close to its 2017 low of $1.034, which was close to the euro's 2017 low of $1.038. It would be its lowest point in nearly 20 years.
The euro was on 104.75, just off its 20 year peak of 104.92, the dollar index's strength was kept at 104.75.
The pound was down to $1.2206, and the Aussie dollar was also bruised at $0.6887.
After a week of turmoil, the markets of cryptocurrencies were steadier on Friday after the risk-off mood and the collapse of the stable coin TerraUSD.
The sell-off has taken the combined market value of all cryptocurrencies to $1.2 trillion, less than half of where it was last November, according to data from CoinMarketCap, and sent bitcoins to as low as $25,401. It was its lowest level since December 28, 2020, and was 05 on Thursday.
In the early hours of Friday, things calmed with bitcoins up 1.73% trading around $29,400.