Safe Haven Flows Boost Yen, Reaching Seven-Month High Against Yuan
9 April 2025 路 Uncategorized 路
Source: 路 https://finance.technews.tw/2025/04/07/safe-haven-flows-into-the-jpy/
On May 2nd, US President Donald Trump announced reciprocal tariffs that sent shockwaves across the globe and triggered turmoil in international stock markets as risk aversion escalated sharply. This drove a significant increase in the Japanese yen's exchange rate.
According to Bank of Taiwan鈥檚 foreign currency rates, on May 3rd, the highest selling price for cash Yen reached 楼0.2315, marking a seven-month high. Trump announced that reciprocal tariffs would be imposed on over 180 countries, including China, Europe, and Japan, with tariff rates of 34%, 20%, and 24% respectively on imported goods from these major economies; Taiwan鈥檚 rate is set at 32%.
The market was caught off guard by the unexpectedly high tariffs announced by Trump. This sparked increased concerns about a potential economic recession and caused the US dollar index to fall below the psychological level of 102, while global stock markets crashed. Investors sought safe-haven assets, leading to a sharp rise in the Japanese yen鈥檚 exchange rate against the US dollar, even surpassing the 楼145 price point.
The Yen's strong appreciation resulted in significant depreciation of NT$ at opening, driving up foreign currency conversion rates for JPY. According to Bank of Taiwan鈥檚 foreign currency rates on May 3rd, cash selling prices reached a seven-month high of 楼0.2315.
Banking sources indicated that local stocks plummeted on May 3rd while the NT$ exchange rate remained relatively stable and even showed some recovery in the afternoon session鈥攑otentially influenced by central bank intervention to stabilize currency rates. However, it is unlikely that negative impacts from these tariff measures will dissipate quickly. Financial markets are expected to remain volatile as observers monitor progress made during international negotiations regarding tariffs.
(Author: Pan Tzyu-Yu)
According to Bank of Taiwan鈥檚 foreign currency rates, on May 3rd, the highest selling price for cash Yen reached 楼0.2315, marking a seven-month high. Trump announced that reciprocal tariffs would be imposed on over 180 countries, including China, Europe, and Japan, with tariff rates of 34%, 20%, and 24% respectively on imported goods from these major economies; Taiwan鈥檚 rate is set at 32%.
The market was caught off guard by the unexpectedly high tariffs announced by Trump. This sparked increased concerns about a potential economic recession and caused the US dollar index to fall below the psychological level of 102, while global stock markets crashed. Investors sought safe-haven assets, leading to a sharp rise in the Japanese yen鈥檚 exchange rate against the US dollar, even surpassing the 楼145 price point.
The Yen's strong appreciation resulted in significant depreciation of NT$ at opening, driving up foreign currency conversion rates for JPY. According to Bank of Taiwan鈥檚 foreign currency rates on May 3rd, cash selling prices reached a seven-month high of 楼0.2315.
Banking sources indicated that local stocks plummeted on May 3rd while the NT$ exchange rate remained relatively stable and even showed some recovery in the afternoon session鈥攑otentially influenced by central bank intervention to stabilize currency rates. However, it is unlikely that negative impacts from these tariff measures will dissipate quickly. Financial markets are expected to remain volatile as observers monitor progress made during international negotiations regarding tariffs.
(Author: Pan Tzyu-Yu)