The yen rose to 156.08 per dollar early Friday in Asian trading as investors sought safer positions during a technology selloff, according to MUFG Research, despite higher U.S. policy rates.
USD/JPY later recovered toward 157 as Asian equities rebounded, MUFG said. The Federal Reserve’s target range was 3.75% to 4.00% after its Sept. 16 decision, while the Bank of Japan’s (BOJ) overnight call-rate guideline was around 1.25%, effective Sept. 24. That left the U.S. rate 2.5 to 2.75 percentage points higher.
Japan’s September consumer price index rose 2.1% from a year earlier both overall and excluding fresh food. The measure excluding fresh food and energy was up 2.4%. S&P Global’s October flash composite purchasing managers’ index was 52.3, unchanged for a second consecutive month.
MUFG linked the yen’s move to risk aversion after the Nasdaq Composite fell 2.6% overnight amid concern about AI spending. Reuters also reported doubts about whether the investment boom in artificial intelligence can be sustained.
Reuters reported that strategists viewed the yen buying as hedging rather than evidence of Japanese institutions bringing money home. The news agency quoted Shoki Omori, Deutsche Bank Japan chief fixed-income strategist, describing the buying as “a hedge, not as an allocation.”
U.S. Treasury data show the 10-year par yield at 5.13% on Oct. 21, 4.96% on Oct. 22 and 5.00% on Oct. 23. The BOJ’s September statement said further rate increases would depend on economic and price conditions, with officials weighing when and how quickly to act. The Federal Reserve is scheduled to meet Oct. 27-28, followed by the BOJ on Oct. 29-30.
