Yen exerts safe-haven pulling power amid Brexit, Italian budget worries

Tuesday,   23-Oct-2018   11:30 AM (IST)

The Japanese yen, a safe haven in uncertain times, firmed against the dollar on Tuesday, as the euro and sterling suffered due to doubts over Italy’s budget spending and over British Prime Minister Theresa May’s future with Brexit talks stalled. The dollar weakened 0.21 in Asian trade to trade at 112.55 yen, gaining as risk-shy investors retreated from Asia’s main share markets. The sterling traded flat at $1.2960 on Tuesday, having lost 0.83 percent on Monday, its steepest fall in percentage terms since Sept. 21. The pound has lost 2.2 percent versus the greenback in the last seven trading sessions. With just over five months until Britain is scheduled to exit the EU, Brexit talks have hit an impasse, sparking speculation that May could be toppled by rebels in her Conservative Party. The euro eased marginally to $1.1453 on Tuesday, as concern over Italy’s free spending budget drove sentiment. The single currency failed to draw relief from a fall in Italian 10-year bond yields on Monday. The benchmark Italian 1-year yield declined by 3 percent on Monday, its steepest fall in percentage terms since Oct. 3. The dollar index, a gauge of its value versus six major peers, traded flat at 96.02 on Tuesday.