Yen May Extend Gains as Risk Aversion Sweeps the Markets
- Yen gains, Aussie falls as Asian stocks follow Wall Street downward
- NZ Dollar holds up despite risk-off mood as RBNZ rate decision nears
- Index futures hint risk aversion set to continue in European, US trade
The Japanese Yen outperformed in overnight trade as stocks slumped across Asian bourses, offering a lift to the standby anti-risk currency. The Australian Dollar proved weakest on the session as investors’ sour mood weighed on the sentiment-sensitive unit. The Kiwi Dollar managed to hold up a bit better, with traders probably unwilling to take strong directional bets ahead of the upcoming RBNZ rate decision.
A near-empty European data docket and a decidedly underwhelming one in the US later in the day may keep risk trends at the forefront. Index futures tracking major US and European equity benchmarks are pointing decidedly lower in late Asian trade, suggesting a defensive tone will persist from here. That may see the Yen continue to build higher as higher-yielding commodity currencies bear the brunt of selling pressure.
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** All times listed in GMT. See the full DailyFX economic calendar here.
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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