Yen set for biggest rally in a month as risk-averse investors shun dollar
TLT•The yen was set for its strongest daily rally in a month, with the dollar down 0.6% at 157.27 yen as investors sought safer assets. The Bank of Japan is expected to leave rates unchanged at 1.25% next week.
1. Yen strengthens
The yen gained as investors grew wary of fragile equity markets, high crude prices and uncertainty over future returns from AI. Treasury yields also fell as investors moved into bonds and unwound some bets on future US rate increases. The dollar fell 0.6% to 157.27 yen, its largest drop since late September, and the yen strengthened against the euro, pound and Australian dollar.
2. Rate decisions ahead
The Bank of Japan is expected to leave rates at 1.25% next week. Markets expect rates to rise gradually to around 2% by the end of 2027. The European Central Bank is expected to hold its benchmark rate at 2.5% next week, while the euro traded at $1.1234 as concerns about French debt weighed on the currency.
