Japan’s currency remains unmoved at 164 per Dollar as regional stocks plunge, signaling its shift from safe-haven asset to carry-trade funding tool.
The Yen traded near 164.00 per Dollar on Tuesday, barely reacting to Asia’s steepest equity selloff of the year. The currency stayed within a 30-pip range, defying expectations for a haven rally as regional markets tumbled.
Korea’s benchmark index fell nearly 11%, triggering its eighth circuit breaker of 2024, while Japan’s Topix dropped 4% and Taiwan’s index slid 4.7%. The declines followed reports of a Chinese manufacturer entering lithography equipment production, challenging a Dutch monopoly.
Analysts said the Yen’s stability reflects its role as a funding currency for carry trades, with implied volatility compressed and Japan’s policy rate at 1.00%. The lack of movement suggests investors no longer view it as a safe-haven asset.