Not a Member? Join Now!   Already a Member? Sign In!

Japanese Yen Gains as Asia Stock Markets Plunge (Update)

Risk aversion dominated the Asian session with the USD, JPY and the HKD the three currencies to benefit from the sharp decline in Asian stocks and the sell-off in Asian regional currencies. Stock indexes in Japan and South Korea declined by over 6% by the afternoon with Hong Kong stocks down over 5% and Australia's index down over 4% as the global financial crisis continues. The INR traded to a record low while a ten-year low was traded on the IDR and an 11-year low on the KRW. Intervention was reported on the KRW, MYR, PHP, IDR and INR to stem losses with suspicion of RBA support on the AUD, particularly after the data that showed over $A3 bln of AUD buying in intervention in October. The HKMA was also intervening as well, continuing action that began last week but the HKMA was preventing HKD strength and defending the peg as the HKD serves as a defector replacement for the USD as a safe-haven status. Commodities remained under pressure with Nymex crude prices under $53, copper trading to a four-year low and aluminum to a three-year low. US two-year treasury yields hit record lows on the risk aversion play. USD-JPY, which held above the late NY low of 95.56 much of the session, dropped to lows of 94.98 in the afternoon. EUR-USD, though pressured by EUR-JPY losses, found support around 1.2473-74 during the session.