(Reuters) – SingaporeThe Japanese yen and the U.S. dollar both went up in Asia on Friday, as investors rushed to buy safe assets after former Japanese Prime Minister Shinzo Abe was shot and as market jitters grew ahead of highly anticipated U.S. jobs data.
A government spokesman said that Abe was shot while running for office on Friday. His health wasn’t known.
As soon as the news came out, the yen went up as much as 0.5 percent, but then it went back down to about 135.60 yen per dollar.
Bart Wakabayashi, branch manager at State Street (NYSE: STT) in Tokyo, said, “I think the yen is just doing its safe-haven thing.”
“Forex market players are pretty set in the way they trade,” he said. “When bad news comes out, they automatically buy dollars and yen.”
The move is part of a bigger change in how people feel about the yen. During the first half of 2022, it lost nearly 16% of its value against the dollar. However, it has been gaining ground lately because fears about global growth and the possibility of a change in central bank policy have given it a boost.
Investors are worried that an energy crisis caused by Russia’s uncertain gas supply could lead to a recession on the continent. This is making the euro fall toward the same value as the dollar.
This week, the euro has fallen more than 2% and hit a 20-year low of $1.0140 in Asia. Its fall has pushed the U.S. dollar index to its highest level in 20 years, and on Friday it was still close to that level at 107.080.
“Europe faces big risks related to its dependence on energy, the high cost of living for consumers, and the fact that it is made up of many different countries.” This means the euro/dollar will go down, “analysts at Citi said.
The Australian dollar fell along with the mood on Friday, but it looks like it will have a steady week. This is because China announced a stimulus programme focused on building infrastructure, which traders hope will increase the demand for raw materials.
It was last worth $0.6820, down 0.3 percent from the previous day.The value of the New Zealand dollar dropped by 0.2%, to $0.6167.
Sterling also seems to have done pretty well during a week of political chaos in Britain. It fell by 0.7% over the course of the week, but it kept most of its Thursday gain after Prime Minister Boris Johnson resigned, making it clear what would happen to him. [GBP/]
The last time the pound bought $1.15, it was on track to have its best week against the weak euro in more than two years.
Investors have been worried about the U.S. economy, even though the most recent data has been better than expected. This is because rising energy prices seem to be taking the wind out of confidence and growth in Europe.
The next sign is the U.S. non-farm payrolls report, which is due at 12:30 GMT. Economists think that about 268,000 jobs were added in June.
Some worries about a recession might go away if the number was better, but it might also make people more likely to bet on a rate hike and boost the dollar.
“Stronger payroll gains would increase the likelihood that the Fed will take an even more aggressive stance,” said Carol Kong, a strategist at Commonwealth Bank of Australia (OTC: CMWAY) in Sydney.
Alan Ruskin, a strategist at Deutsche Bank (ETR: DBKGn), said that just meeting expectations would be enough for people to talk about “U.S. exceptionalism” in the face of a global energy shock.
This can keep people interested in buying dollars. “Parity between the euro and the dollar is the most obvious multi-day/week goal,” he said.
The dollar has also been strong in emerging markets, sending several Asian currencies to multi-year lows and India’s rupee to a record low this week. [EMRG/FRX]
In the meantime, Bitcoin seems to be making a comeback. In the past week, it has gone up by almost 14% to $22,000.