During the week from 19 to 23 October, dollar-yen plunged from the mid-¥158 range to the low ¥156 range, after which risk-averse yen buying driven by declines in AI-related stocks spread across the market. Major currencies generally traded in narrow ranges, while cross-yen rates fell sharply.
The week began with continued directionless trading, but in the latter half, investor funds shifted into safe-haven assets following earnings reports from US semiconductor-related companies and declines in AI-related stocks, intensifying yen buying. Dollar-yen tested lower levels from the mid-¥158 range and plunged to the low ¥156 range late in the week after breaking below its 200-day moving average.
Euro-dollar came under upward pressure from concerns over France’s fiscal position and softened into the $1.11 range, although downside remained firm around the $1.12 level. Pound-dollar also recovered temporarily to the $1.34 range in response to UK employment and inflation data, but overall it frequently showed signs of losing relative strength.
Cross-yen rates remained firm in the first half of the week, but fell sharply in the latter half as equity prices declined and the yen strengthened, with euro-yen dropping to the ¥175 range and pound-yen to the ¥209 range. While US interest-rate movements influenced trading in the New York market, the yen notably attracted increased demand as a safe-haven asset.
On 23 October, dollar-yen fell again temporarily into the ¥156 range under the impact of a sharp decline in the US Nasdaq, but rebounded to the ¥157 range as risk aversion intensified in European trading. It was also pushed back into the ¥156 range late in the session, and the performance of AI-related stocks and movements in Japanese and US interest rates are expected to be the focus next week.