JPY: Yen soars as Wall Street crashes

  • Yen jumped and then pulls back modestly. 
  • Dow Jones collapsed by 1,500 and the rebounded modestly. 
  • US yields tumbled from multi-year highs.

A flash crash in Wall Street triggered a rally of the yen. The Japanese currency jumped across the board: USD/JPY dropped to 109.11, earlier today it was trading at 110.20; AUD/JPY fell to 86.29 (7-week low) and GBP/JPY dropped to 152.98, erasing last week gains. 

The Dow Jones collapse 1,500 points at certain point. Near the end of the session it was down 800 points (-3.13%). The dramatic sell-off boosted the demand for US bonds. The 10-year yield was at 4-year highs above 2.80 and dropped to 2.70, on the biggest daily slide in months. Then it moved off lows rising to 2.76. 

Volatility across financial markers was already high with the sharp decline in Wall Street last week and today jumped to new highs. 

Compared to previous “flash crashes”, the impact in the currency market so far has been modest. 

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