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Yen shakes off Brexit in longest rally for 5 years; pound wavers
[SINGAPORE] The yen strengthened for an eighth day, its longest winning streak since February 2011, as anxiety about a potential British exit from the European Union drove investors to the safest assets.
Japan's currency headed toward its strongest level in almost two years, while the pound halted a two-day, 3.5 per cent rally before Thursday's historic vote. A gauge of the dollar fell for a fifth day before Federal Reserve Chair Janet Yellen's testimony on monetary policy to lawmakers Tuesday and Wednesday.
"The Brexit vote clearly has one risk-averse outcome, so the market is buying the yen for insurance," said Imre Speizer, a market strategist at Westpac Banking Corp in Auckland.
"This may continue until Thursday, after which the direction of the yen will depend on whether the outcome is 'stay', in which case yen will be sold, or 'leave', in which case more yen will be bought."
The yen climbed 0.2 per cent to 103.70 per dollar at 9:16 am in Tokyo, taking its advance since June 10 to 3 per cent. Japan's currency reached to 103.55 last week, the strongest level since August 2014. The pound slipped 0.2 per cent to US$1.4674.
The Bloomberg Dollar Spot Index slid 0.1 per cent as traders cut back their bets on higher US borrowing costs, pricing in less than even odds for an increase as late as February 2017.