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FOREX-Yen surges on risk aversion; Turkish lira hits record low

Published 23/03/2018, 01:28 pm
FOREX-Yen surges on risk aversion; Turkish lira hits record low
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* Dollar hits 16-month low of 104.635 yen in early Asia

* Turkish lira hits record low of 4.0375 per U.S. dollar

* Stop-loss cross/yen sales, including TRY/JPY cited

* Trump may impose tariffs on up to $60 bln of Chinese goods

* Yen rises broadly on risk aversion

(Updates prices, adds comments)

By Masayuki Kitano

SINGAPORE, March 23 (Reuters) - The yen hit a 16-month high against the dollar on Friday, while the Turkish lira skidded to a record low, as concerns over rising global trade tensions triggered a bout of investor risk aversion.

The yen rose broadly amid talk of position unwinding by Japanese retail investors, who had held long positions in higher-yielding currencies such as the Turkish lira against the Japanese currency.

"It's mainly driven by cross/yen selling and stops from retail (investors) from what we can see," said Tarek Horchani, head of sales trading in Asia-Pacific for Saxo Markets in Singapore.

"It's a pure risk-off trade," he said, adding that there was stop-loss selling in cross/yen pairs.

The dollar fell to as low as 104.635 yen in early Asian trade on Friday, the greenback's lowest level since November 2016, as the Japanese currency pushed higher. The dollar was last down 0.4 percent at 104.90 yen JPY= .

According to Reuters data, the Turkish lira slid by more than 3 percent against the yen TRYJPY=R early on Friday. It was last down 1.2 percent on the day at around 26.41.

Against the U.S. dollar, the lira TRYTOM=D3 fell to a record low of 4.0375 per dollar at one point. After paring some losses, the Turkish lira last stood at 3.9680 per dollar.

The broad rise in the yen came after financial markets were rattled by worries over rising U.S.-China trade tensions.

U.S. President Donald Trump signed a presidential memorandum on Thursday that will target up to $60 billion in Chinese goods with tariffs, but only after a 30-day consultation period that starts once a list is published. his actions appeared to be more of a warning shot than the start of a full-blown trade war with Beijing, U.S. equities slumped as investors fretted about the potential impact on global trade. the wake of Trump's actions, China's commerce ministry said on Friday that the country was planning measures against up to $3 billion of U.S. imports to balance U.S. tariffs against Chinese steel and aluminium products. yen is often viewed as a safe haven currency in times of market turbulence and economic uncertainty, partly because of the resilience provided by Japan's current account surplus.

"The yen continues to be the beneficiary of global risk aversion, and even as we melt through the 105 level like a hot knife through butter, there remain very few reasons not to be short USDJPY in this environment," Stephen Innes, head of trading in Asia-Pacific for Oanda in Singapore, wrote in a note.

MSCI's broadest measure of Asia-Pacific equities outside Japan .MIAPJ0000PUS fell 2 percent.

The euro also weakened against the yen, hitting a low of 128.96 yen EURJPY=R , the euro's lowest level since August 2017. The euro later regained some footing and was last down 0.2 percent on the day at 129.28 yen.

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