Yen Pushes Higher Against Dollar and Euro

The yen pushed higher against the dollar and euro Thursday while the pound recovered some of its losses as traders weighed the fallout of Britain’s vote to leave the EU.

Investors sought out safe assets, pushing the dollar down to 100.94 yen from 101.31 yen in late trade in New York, while the pound strengthened after hitting a 31-year low of $1.2798 earlier on Wednesday.

The British unit failed to recover above the $1.30 mark as investors remained jittery about the impact of Brexit, with sterling changing hands at $1.2990 against 1.2922 on Wednesday in US trade.

The Japanese currency meanwhile firmed on the back of the overnight publication of minutes from the US Federal Reserve’s most recent policy meeting.

Those showed the rate-setting board was split on whether the world’s top economy can withstand a hike in borrowing costs this year.

The US central bank kept interest rates on hold at a meeting last month — before Britain’s June 23 referendum on its EU membership — clouding the outlook for a stronger dollar, analysts said.

“Without an interest rate increase from the US… the market is now expecting the yen to climb to 95 per dollar,” Mitsushige Akino, an executive officer at Ichiyoshi Asset Management, told Bloomberg News.

The euro bought 112.07 yen against 112.43 yen and was practically unchanged against the dollar, changing hands at $1.1099 from $1.1097 in US trade.

“The yen is gaining because it is the world’s preeminent safe-haven currency and dipping below 100 per dollar again is only a matter of time,” Joseph Capurso, a Sydney-based senior currency strategist at Commonwealth Bank of Australia, told Bloomberg News.

The Australian dollar tumbled as low as 74.67 US cents from 75.14 cents after Standard & Poor’s said it had cut its outlook on the country’s AAA credit rating after the weekend’s general election left no clear winner and the prospect of a hung parliament.

“We do not believe S&P’s news is a trigger for a big fall,” said Capurso of Commonwealth Bank of Australia.

“After all, the rating has not been cut, merely the risk of a cut to the rating has increased.”