The Japanese yen rose nearly half a percent against the US dollar on Friday, in what appeared to be a safe haven in the minutes after news that former Prime Minister Shinzo Abe had been gunned down. The yen soared to $135.33 per dollar after news that Abe had been taken to hospital after collapsing during a speech in the western city of Nara following gunshot-like noises, according to reports from public broadcaster NHK.
Kyodo News said the former prime minister, architect of the Abenomics brand of reforms, was unconscious and appeared to be in cardiac arrest.
The euro was stuck at a 20-year low and licked its wounds at the end of its worst week in two months, as investors braced for Europe to fall into recession, while markets waited for US jobs data to show the next direction. to be determined for the dollar.
The euro has fallen more than 2% this week on fears that gas shortages in Europe will loom and economic growth will suffer. It hit a two-decade low of $1,0144 overnight and barely clings above parity, last buying $1,0161.
The euro’s decline has seeped the US dollar index this week to a two-decade high of 107.270, having last been just below that level, rising 0.04% in Asia at 107.02.
“Europe is exposed to major risks related to energy dependency, a consumer cost crisis and fragmentation risk. This means a lower euro/dollar,” Citi analysts said.
The Australian dollar rose 0.3% to $0.6850 on Friday, scraping from a two-year low of $0.6762, aided by an infrastructure-led stimulus program announced in China that traders hope will boost demand. raw materials will be stimulated.
Sterling also appears to have navigated a week of British political chaos relatively well. It fell 0.3% this week, but bounced back a bit overnight when Prime Minister Boris Johnson stepped down, ending uncertainty about his future.
The pound last bought $1.2053 and was on track for its best week in more than two years on the ailing euro.
The New Zealand dollar rose 0.3% to $0.6192 and appears poised for a stable week. Growing unease about the world’s economic prospects has stabilized a sliding Japanese yen as investors look for safety.
While rising energy prices are trying to take the wind out of confidence and growth in Europe, investors were also concerned about the US economy, although the most recent data came in better than expected.
US nonfarm payrolls are the next indicator, expected at 1230 GMT, with economists forecasting some 268,000 jobs will be added in June.
A stronger figure could allay some recession concerns, but would likely contribute to rate hikes and could lift the dollar.
“Greater wage gains would support expectations for an increasingly aggressive policy stance from the Fed,” said strategist Carol Kong of the Commonwealth Bank of Australia in Sydney.
Deutsche Bank strategist Alan Ruskin also said meeting expectations alone would be enough to help speak of “‘American exceptionalism’ in the face of a global energy shock.”
That could keep the dollar bidding well, “with euro/dollar parity being the most obvious multi-day/weekly target,” he said.
The dollar has also held up in emerging markets, pushing several Asian currencies to multi-year lows this week and the Indian rupee hitting record lows.
Bitcoin has shown some semblance of recovery, gaining close to 15% over the course of the week to $22,100.
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