Japan’s yen was heading toward its strongest weekly performance since early September, with Reuters tying the advance to demand for safety after losses in artificial intelligence stocks.
Reuters’ Friday market snapshot showed the yen 0.18% higher at ¥156.45 per dollar, putting it on course for an approximately 0.9% weekly advance through Oct. 23. EconoTimes previously covered an analyst’s dollar-yen range outlook.
The Bank of Japan (BoJ) set its overnight call-rate guideline at around 1.25% on Sept. 18, effective Sept. 24. The central bank said it would adjust policy support with economic activity, price developments and financial conditions in view. Its next policy meeting is scheduled for Oct. 29–30.
Cross-border bond activity offers context for the currency move, though the figures do not establish whether investors exchanged proceeds for yen. The Ministry of Finance recorded net dispositions of ¥161.6 billion in foreign long-term debt securities by Japanese residents in the week ended Oct. 17, the fifth consecutive week of net dispositions. Nonresidents recorded net acquisitions of ¥1.4542 trillion in Japanese long-term debt securities, their third consecutive week of net acquisitions. The figures cover designated major investors and do not show whether foreign buyers hedged their currency exposure.
FXStreet reported that Commerzbank foreign-exchange analyst Volkmar Baur expects further BoJ policy normalization and securities flows toward Japan to support the yen in coming months. Reuters quoted Shoki Omori, Deutsche Bank’s chief fixed-income strategist for Japan, saying, “The yen was bought as a hedge, not as an allocation.” Reuters also reported that Omori saw no evidence of Japanese institutional investors bringing overseas assets back to Japan.
September inflation remained above the BoJ’s 2% price-stability target. The Statistics Bureau of Japan said the all-items consumer price index (CPI) rose 2.1% from a year earlier; the index excluding fresh food also increased 2.1%, while the measure excluding fresh food and energy rose 2.4%.
