The yen strengthened on Friday in Asia, as investors shifted into safer investments ahead of central bank meetings in the US and Japan, while Britain’s upcoming EU membership vote was also in focus.
Emerging currencies also lost ground against the US dollar, as analysts warned that a pickup in the higher-yielding, or riskier, units might have run its course.
“The rally be could be near an end ... so long as the [US Federal Reserve] doesn’t turn too dovish next week,” Khoon Goh, a senior foreign-exchange strategist at Australia & New Zealand Banking Group, told reporters. “The weakness this morning is likely due to profit-taking and position adjustment... We have had quite a rally in emerging-markets since the weak US payrolls” last week.
Markets are keeping a close eye on the Fed meeting for clues about when it plans to lift interest rates, which would tend to boost the US dollar at the expense of other currencies.
The Bank of Japan (BOJ) also holds a meeting, with investors keen to see if policymakers unleash more stimulus to boost the struggling economy.
In early afternoon trading on Friday, the greenback weakened to ￥106.98 yen from ￥107.10 on Thursday in New York.
The euro changed hands at US$1.1297 against US$1.1315. The single currency was also sitting around three-year lows at ￥120.91, well down from ￥121.18 in US trading.
Investors tend to buy the yen during times of turmoil or uncertainty.
Growing anxiety that Britain would vote to leave the EU in a referendum on June 23 is also spreading among traders.
“Ahead of the Fed and BOJ next week, and the [British] vote... the week after, no one wants to take risks today,” said Juichi Wako, a senior strategist at Nomura Holdings.
The New Taiwan dollar closed at NT$32.225 on Wednesday, from NT$32.506 on Saturday last week. Markets in Taiwan were closed on Thursday and Friday for the Dragon Boat Festival holiday.
In other deals on Friday, the won and oil-linked ringgit were the main decliners among the emerging units against the US dollar. The won slipped 0.8 percent, while the ringgit dropped 0.6 percent.
The rupee shed 0.2 percent, the baht slipped 0.1 percent and the peso was off 0.2 percent.
Additional reporting by staff writer
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