The mood in the New York market changed completely from the previous day, with risk-averse yen buying advancing against a backdrop of a sharp drop in US stocks. In the morning, dollar-yen was pushed down from the mid-¥158 range to the mid-¥157 range.
Risk aversion spread in the NYSE market against a backdrop of a sharp drop in US stocks, strengthening the yen's upward trend. Dollar-yen had been trading in the mid-¥158 range in the morning but gradually fell to the mid-¥157 range.
Following the Democratic Party's landslide victory in the midterm elections, views concerning the future direction of fiscal policy and possible groundwork for tax increases spread through the market. Sharp falls in semiconductor and server-related stocks spread across the market, reducing overall risk tolerance.
The euro temporarily rose against the dollar to around $1.1270 before losing momentum and moving into the lower $1.12 range during New York trading. Euro-yen fell to the low ¥177 range during New York trading. An expanding short-position trend has also been noted.
There were also moments when the Bank of England maintained a hawkish stance rather than holding its policy rate, prompting discussion of next year's inflation outlook and the possibility of additional rate hikes. While assessing short-term developments, the market expects the risk-averse mood to continue.