TOKYO — The yen and euro got a boost Wednesday as traders bought safe-haven currencies while commodity-linked units took a beating on the back of weak oil prices and worries about the global economy.
The global supply glut, weak demand and a growth slowdown in mainland China have combined with soaring production to send crude prices slumping over to seven-year lows. Equity markets have plunged in response. Investors’ flight to safety helped the Japanese currency — typically seen as a less risky asset in times of uncertainty and turmoil.
The yen also got support after better-than-expected revised Japanese GDP data Tuesday tempered expectations for more stimulus by the Bank of Japan — a move that would tend to weaken the yen. In Tokyo, the U.S. dollar slipped to 122.78 yen from 122.97 yen in U.S. trade and is well down from levels above 123 yen earlier this week. The euro, meanwhile, was flat at 133.94 yen while it rose to US$1.0906 from US$1.0892 in U.S. trading. Also supporting the common currency was the European Central Bank’s decision last week not to increase the size of its stimulus plan while a rate cut came in well below market expectations. “There is no incentive to sell the euro now, with the ECB having taken action and no follow through seen for some time,” Kenji Yoshii, a currency strategist at Mizuho Securities, told Bloomberg News. “It may rise if commodities prices slide further to spur risk aversion, which will favor developed nation currencies over emerging and commodities currencies.”
The Malaysian ringgit slipped 0.08 percent against the U.S. dollar Wednesday, while Indonesia’s rupiah fell 0.74 percent.