The Japanese yen outpaced all G10 peers after a steep 5.5% drop in the Nasdaq 100 spurred aggressive haven buying. Falling bond yields have created ideal conditions for the currency to rebound further against the dollar. Strategists at CIBC project the exchange rate could strengthen to 148 by late 2027 if capital continues rotating away from US assets. Nomura also expects sustained tailwinds if domestic rate increases prompt Japanese money managers to repatriate overseas funds.
Key points
Nomura currently holds a long yen position against the dollar as its primary trade for de…: Nomura currently holds a long yen position against the dollar as its primary trade for declining yields and equities.
Domestic asset repatriation could accelerate if the Bank of Japan opts to implement furth…: Domestic asset repatriation could accelerate if the Bank of Japan opts to implement further interest rate increases.
Concerns regarding artificial intelligence investments following a Democratic midterm swe…: Concerns regarding artificial intelligence investments following a Democratic midterm sweep helped trigger the broader selloff in tech equities.
Sources checked by our analysis pipeline: 1
The Japanese yen rose as a selloff in US technology shares led traders to seek safer assets — a trend that strategists at CIBC and Nomura expect will continue.
The yen strengthened as much as 0.6% against the US dollar to 157.54 on Thursday, outperforming all of its Group of 10 peers after a Democratic sweep in this week’s US midterms led to concern about artificial intelligence investments that hit US stocks.
“If the AI trade continues to unwind, investors will be looking for somewhere to go,” said Sarah Ying, head of foreign-exchange strategy at CIBC. “We suspect that demand for haven currencies would rise,” including the yen or franc.
She expects the yen to strengthen to 148 against the dollar by the end of 2027, a more-than-6% rise from current levels, as investors flee dollar-denominated assets.
Dominic Bunning, head of Group of 10 strategy at Nomura, said the firm remains long on the Japanese yen against the dollar, calling it the “consistent best FX trade” in an environment in which equities and yields are both declining. The Nasdaq 100…
Market participants are monitoring positive upward momentum as shares of Ameren push higher during current trading. Comprehensive drivers and broader context behind the utility company's advance remain under active development. Investors are awaiting further details to evaluate the sustainability and fundamental impact of this movement.
DraftKings shares have experienced a sharp decline today. However, specific details explaining the drop in the stock's price were not immediately provided.