Yen surges as BoJ disappoints and Brexit worries mount

June 17, 2016 | 12:00

(0) user say

The yen surged to a 22-month high against the greenback on Thursday after the Bank of Japan disappointed investors hoping for more stimulus for the tepid Japanese economy.

The yen and US dollar notes. (AFP/File/Tang Chhin Sothy)

NEW YORK: The yen surged to a 22-month high against the greenback on Thursday (Jun 16) after the Bank of Japan disappointed investors hoping for more stimulus for the tepid Japanese economy.

The yen also benefited from a flight to safety amid rising fears Britain will vote next week to exit the European Union, wreaking damage on Britain and the global economy.

The Bank of Japan wrapped up a policy meeting leaving interest rates unchanged. But there had been some expectations it could expand stimulus.

Investors pushed the Japanese currency up to 103.55 yen per dollar, its strongest level since August 2014. The yen ended the day with a 1.6 per cent gain. The euro fell as low as 115.50 yen, its weakest level since early 2013.

Polls in Britain, meanwhile, show the Jun 23 Brexit referendum is too close to call. "It's a very crazy, a very volatile market with a lot of speculation," said Boris Schlossberg at BK Asset Management.

Thursday's brutal murder of a pro-EU British lawmaker halted campaigning for the referendum just a week before the vote.

Schlossberg said the market thinks it was very likely now that Britons will vote in favor of remaining in the EU. "If that's the case, it's positive for the euro," he said.

The dollar advanced 0.3 per cent against the euro at US$1.1229. The greenback was flat against the pound, while the euro slipped against the British currency.

AFP

What the stars mean:

★ Poor ★ ★ Promising ★★★ Good ★★★★ Very good ★★★★★ Exceptional