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[TOKYO] The yen gained in Asian trade on Wednesday while a semblance of stability helped the pound and the euro hover above their post-Brexit lows, though the battered European currencies remain hampered by longer term uncertainty.
Even as the markets' risk averse mood eased slightly and regional equities gained, lessening the appeal of the perceived safe-haven yen, the US dollar shed 0.4 per cent to 102.34 yen.
But it held far above its 2-1/2-year low of 99.00 touched in highly volatile trade on Friday in the immediate aftermath of the UK referendum.
"Dollar/yen is its own beast now," and is not just moving on risk sentiment, said Bart Wakabayashi, head of Hong Kong FX sales at State Street Global Markets.
"Pretty much everyone has been calling for a stronger yen, and that's generally the trend, so you don't go long dollar/yen and you look for rallies to sell into."
Japanese authorities have warned in the past that they could intervene in the currency market to stem the yen's rise, but traders suspect the hurdle for yen-selling intervention is high.
At the same time, worries over how Brexit could disrupt the global economies are likely to keep many investors cautious.
"A sense of uncertainty and worry about risks remain in the markets," Japanese Prime Minister Shinzo Abe said at a meeting between the government and the Bank of Japan to discuss market developments after the Brexit vote rocked global financial markets.
The meeting was the second between Mr Abe and the BOJ after Britain's shock vote to exit the European Union, with more expected as Tokyo looks to put in place safeguards against potential instability in financial markets.
The euro skidded 0.5 per cent against the Japanese currency to 113.23 yen The British pound fetched US$1.3337, little changed on the day and holding well above Monday's 31-year low of US$1.3122.
The euro also stabilised at US$1.1067, off its 3 1/2-month low of US$1.0912 hit on Friday.
Against sterling, the common currency traded at 82.95 pence, within sight of its Monday's high of 83.80, its highest level in more than two years.
"The pound may not visit the lows touched earlier in next couple of days, but it will likely do so if we look at a longer time frame, say to September or December," said Masafumi Yamamoto, chief FX strategist at Mizuho Securities.
As European currencies recovered some of their poise and the yen firmed, the US dollar index, which tracks the greenback against a basket of six major currencies ticked down 0.2 per cent to 96.038, pulling away from Monday's high of 96.705.
The US dollar had risen on Tuesday after US first-quarter economic growth was revised up to 1.1 per cent from the previous reading of 0.8 per cent.
But undermining the US dollar, US money markets are pricing out any chance of the Federal Reserve raising interest rates in the coming 12 months, suggesting a tempering of the currency's yield allure.
Elsewhere, the Turkish lira was stable so far after attacks by suicide bombers killed at least 36 people in Istanbul's main international airport, Europe's third busiest.
The lira traded little changed at 2.9025 to the US dollar.
For more coverage of the EU referendum, visit bt.sg/BrexiT