Signs of a larger than previously expected fiscal stimulus plan for Japan had the yen back on the defensive today, as investors bet the Bank of Japan (BOJ) would match that with a new bout of money-printing aimed at weakening its currency.
Crude oil closed below $44.00 a barrel, suggesting there are underlying weaknesses not only in the energy sector but in the global economy. It is becoming more clear the Brexit vote was just enough to slow demand from a path of market balance to the perception of continued oversupply.
Surveys that suggested the UK economy may start to contract in quarterly terms after last month's Brexit vote dominated trade on major currency markets today, knocking almost 1% off sterling across the board.
The dollar rose to a one-week high against the yen on Monday, climbing almost 2%, following Japanese Prime Minister Shinzo Abe's call for a fresh round of fiscal stimulus after a victory for his ruling coalition in local elections.
The safe-haven yen rose sharply against the euro and dollar while sterling fell to its lowest in more than 30 years today, as currency markets fretted about more signs of economic stress stemming from Britain's decision to leave the European Union.
The yen climbed against the dollar today, boosted by the uncertain risk environment left by Britain's shock vote to leave the European Union as well as the view that the U.S. Federal Reserve will now hold off from raising interest rates.