The safe-haven yen surged to its highest level since the start of the year against the dollar on Wednesday, as the first U.S. presidential debate between Kamala Harris and Donald Trump took center stage.
The yen's strength was bolstered by a combination of factors, including the heated debate and anticipation of key economic data.
In early trading, the dollar fell as much as 0.68% to 141.50 yen, a level not seen since January 2. It was last quoted at 141.83 yen as of 0149 GMT. The dollar-yen pair often tracks long-term Treasury yields, which extended their overnight decline in Asian trading, hitting 3.635%—a peak not seen since June of the previous year.
Comments from Bank of Japan board member Junko Nakagawa also played a role in strengthening the yen. Nakagawa reiterated that the central bank would continue to raise interest rates if the economy and inflation align with forecasts.
The euro gained 0.16% to $1.1038, recovering from a previous dip to $1.10155, marking its lowest level since August 19. Sterling edged up to $1.3089 after falling to $1.3049 in the previous session, its weakest point since August 21. The dollar index, which measures the greenback against a basket of major currencies, slipped 0.15% to 101.49 after reaching a one-week high of 101.77 on Tuesday.
In the debate, Democratic Vice President Kamala Harris criticised Trump’s proposed high tariffs on foreign goods, calling them akin to a sales tax on the middle class. She highlighted her plan to provide tax benefits to families and small businesses as a countermeasure. In response, Trump criticised Harris for persistent inflation during President Joe Biden's term.