Japanese Yen Surges Toward Weekly High as AI Market Anxiety Drives Safe-Haven Demand
The Japanese yen hits a one-month high as investors flee to safe-haven assets amid growing skepticism over the sustainability of the global AI spending boom.
POLICY WIRE — Shanghai/Singapore — The Japanese yen is on track for its most significant weekly advance since early September, fueled by a surge in safe-haven demand as market participants grapple with rising risk aversion.
On Friday, the currency strengthened by 0.3% to reach 156.28 per dollar, marking its strongest performance in over a month. This movement has pushed the dollar toward a three-week low, while US Treasury yields have experienced a sharp decline.
Market sentiment has been rattled by mounting doubts regarding the long-term viability of the artificial intelligence spending boom. These concerns have prompted investors to shift capital into safer assets, providing a boost to the yen.
Simultaneously, geopolitical instability in the Middle East has impacted energy markets, with Brent crude futures climbing above $114 per barrel. Amid these shifting economic conditions, economists are anticipating that the Bank of Japan may soon deliberate on a potential interest rate hike.
Reporting by Policy-Wire (PW)
