* Yen surges to 3-year high vs euro, pound * Brexit concerns spread across markets * Euro/sterling suggested volatility strikes record high By Jemima Kelly LONDON, June 13 The safe-haven yen reinforced
throughout the board on Monday, hitting a three-year high against
both the euro and sterling, on fears that Britain could vote
to leave the European Union in a mandate in just 10 days’
time. Sterling has actually been dominated by worries over a capacity
Brexit considering that late in 2014, but other major currencies have
until now appeared mostly protected from anxiety over the vote. However with bookmakers and betting exchanges reducing their
chances on a vote to leave following a few too-close-to-call
polls at the weekend and one that put the “Leave” project 10
points ahead, worries over the outcome appeared to be spreading
across markets on Monday.
As financiers dropped risky assets, the yen rose by over 1
percent to trade at 119.05 yen per euro, its strongest
given that February 2013. Versus sterling, which was down across the
board, the yen likewise climbed more than 1 percent to 150.16 yen
, its greatest since August 2013. The Japanese currency got as much as 1 percent against
the dollar, striking a six-week high. Experts said the yen has also been driven greater by
expectations that the U.S. Federal Reserve, which starts a.
two-day policy meeting on Tuesday, would strike a dovish tone.
” We expect the spectre of Brexit to be present in FX markets.
throughout this week and next, recommending an encouraging.
environment for the dollar,” stated ING currency strategist Petr.
Krpata, in London. “Given that no rate hike is widely expected from the June.
FOMC (Federal Open Market Committee) meeting, the general market.
belief, rather than market prices of the Fed, ought to be the.
vital driver of dollar crosses.” Cash market futures are presently pricing in less.
than a 20 percent possibility of a July rate hike, near the lowest.
level in current months.
In Frankfurt, Commerzbank strategist Thulan Nguyen stated.
doubts that the Bank of Japan, which also has a policy-setting.
meeting this week, would step in to damage the yen was keeping.
upward pressure on the currency. But while lots of market gamers believe the BOJ will keep its.
policy on hold, that understanding might change if the dollar falls.
below its 18-month low of 105.55 set on May 3, experts stated. As sterling slumped to six-week lows on a trade-weighted.
basis, the cost of hedging versus huge swings against the.
euro over the coming month hit a record high. “I would expect volatilities to increase even more and the markets.
will end up being even bleaker as we head towards the mandate,”.
stated Koichi Yoshikawa, executive director of finance at Requirement.
Chartered Bank in Tokyo. For Reuters’ new Live Markets blog on European and UK stock.
markets see here.
( Added reporting by Hideyuki Sano in Tokyo; Modifying by.