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Yen Soars to Nearly One-month Highs Versus Dollar As Investor Appetite For Riskier Assets Wavers

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Nov, 15th 14:15

The Japanese yen soared to the strongest level in nearly a month against its American counterpart on Wednesday as a slide in oil prices and concerns over the progress of a U.S. tax overhaul weighed on investor appetite for riskier assets.

The Yen added more than 0.8 percent versus the U.S. dollar in European trading session on Wednesday, sending the pair USDJPY to as low as 112.546 – the lowest level since October 19th. The currency pair was also on course for the biggest daily increase in almost 10 weeks.

Demand for safe-haven assets such as the Japanese Yen and Gold increased dramatically due to the fact that investors were running away from perceived riskier assets such as equities. European stocks followed declines in Asia with the Stoxx Europe 600 Index dipping 0.8 percent. The European stock benchmark index extended its slide to a seventh consecutive session and was trading at the lowest level in the last two months.

The U.K.’s FTSE 100 Index lost 0.5 percent and the Germany’s DAX Index shed 0.9 percent, looking set to score their fifth consecutive decline. In Asia, while the Nikkei 225 Stock Average dropped 1.6 percent, the Topix index even plunged lower with a decline of 2 percent to mark its longest streak of losses since September 2016.

Australia’s S&P/ASX 200 Index and Kospi index in Seoul declined 0.6 percent and 0.3 percent, respectively while the Hong Kong’s Hang Seng Index and the Shanghai Composite Index tumbled at least 0.8 percent. Futures of U.S. shares were also trading in negative territory.

Meanwhile, the dollar immersed at three-week lows against a basket of major currencies after data released by the Bureau of Labor Statistics showed retail sales slowed in October after a sharp gain in the prior month. Sales were reported to advance by 0.2 percent last month following a revised reading of 1.9 percent in September. Excluding autos, sales only rose 0.1% after having jumped 1.2 percent in the previous month.

Also reported at the same time with data on retail sales, the report of the consumer price index showed results that were in line with expectations. The consumer price index rose 0.1% in October while the so-called core CPI with food and energy stripped out rose 0.2 percent. Due to the drop in energy prices, the year-on-year CPI index slowed to 2.0 percent last month from 2.2 percent recorded in September.

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