Asian currency markets delivered mixed performances on Friday as a sharp selloff in US technology stocks pushed investors toward safer assets. The Japanese yen benefited from increased risk aversion, while the Taiwan dollar briefly weakened beyond the key 33-per-dollar level.
Meanwhile, the US dollar remained relatively stable ahead of October’s employment report. Investors continued to reassess the Federal Reserve’s interest rate outlook amid growing uncertainty across global financial markets.
The US Dollar Index edged 0.1% higher to 101.70. The USD/JPY exchange rate stood at 157.85, up 0.1%, after the Japanese yen briefly strengthened to a one-week high near 157.40 per dollar.
Other Asian currencies showed mixed movements. USD/TWD traded at 32.988 after briefly exceeding 33, while USD/KRW rose 0.2% to 1,360.36. The onshore and offshore Chinese yuan remained largely unchanged.
The Australian dollar declined 0.3% to $0.6914, while the New Zealand dollar slipped 0.3% to $0.5580. The Singapore dollar also weakened by approximately 0.2%.
Japanese Yen Strengthens as AI Stock Selloff Triggers Safe-Haven Demand
The Japanese yen emerged as one of the strongest major currencies as investors sought protection from increasing stock market volatility.
During the session, the currency gained as much as 0.6% against the US dollar, briefly reaching approximately 157.54 per dollar and outperforming its Group-of-10 counterparts.
The move followed significant losses on Wall Street, where technology and artificial intelligence stocks experienced widespread selling pressure.
The Nasdaq Composite plunged 5.52%, recording its largest daily decline since April 2025. Meanwhile, the S&P 500 dropped 4.36%, reflecting broader concerns about the outlook for US equities.
Investors grew increasingly cautious following the Democrats’ sweeping victory in the US midterm elections. Market participants feared that tighter regulatory scrutiny could affect artificial intelligence investments, particularly the construction and expansion of data centers.
These concerns encouraged a shift away from stocks and toward government bonds and traditional safe-haven currencies.
Although the yen subsequently surrendered some of its gains, the episode highlighted its continuing appeal during periods of financial uncertainty.
A similar pattern emerged during October’s technology stock downturn, when the yen briefly strengthened to 156.08 per dollar before reversing much of its advance.
Taiwan Dollar Weakens Beyond 33 as Technology Shares Plunge
The Taiwan dollar faced particularly strong selling pressure as concerns about the artificial intelligence sector spread across Asian financial markets.
The currency weakened as much as 0.5%, pushing USD/TWD to 33.040. This represented its weakest level since April 2025 and its first move beyond the psychologically important 33 threshold since that period.
Taiwan’s equity market also suffered substantial losses, with local stocks falling approximately 6% amid foreign capital outflows.
The combination of declining technology shares and international investor withdrawals placed additional pressure on the Taiwan dollar, making it one of the region’s weakest performers during the session.
However, the currency later recovered some of its losses, bringing USD/TWD back below 33.
South Korean Won Faces Pressure as KOSPI Plunges
South Korea’s financial markets experienced similar volatility as technology-related selling intensified.
The benchmark KOSPI index dropped 8.6%, falling below the 5,000-point level for the first time in nine months.
The sharp decline triggered a temporary 20-minute trading suspension, highlighting the severity of the market selloff.
Foreign investors had already sold approximately 3.39 trillion won worth of South Korean equities on Thursday, adding to concerns about sustained capital outflows.
Against this backdrop, the US dollar strengthened against the South Korean won. USD/KRW climbed to approximately 1,360.36, following an earlier increase of 1.16% compared with the previous week’s closing level.
The developments reinforced concerns about the vulnerability of Asian currencies to sudden changes in global investor sentiment.
New Zealand Dollar Struggles Amid Weak Economic Growth
The New Zealand dollar continued to face pressure from sluggish domestic economic activity and unfavorable labor market conditions.
Since the pandemic, the currency has depreciated by approximately 11%, making it the second-weakest performer among Group-of-10 currencies after the Japanese yen.
Persistent economic weakness has limited investor confidence in the kiwi, which recently reached a record low against the offshore Chinese yuan.
The New Zealand dollar also fell to its weakest level against the Australian dollar in nearly 14 years.
These developments have increased the cost of imported goods, creating additional economic challenges ahead of the country’s upcoming elections.
Chinese Yuan Retreats After Central Bank Policy Change
The Chinese yuan also came under pressure following a policy adjustment by the People’s Bank of China (PBOC).
The currency had previously strengthened to a more than four-year high near 6.659 per US dollar, supported partly by exporters converting foreign-currency earnings into yuan.
Before the reversal, the yuan had been approaching its fifth consecutive weekly advance and fourth straight monthly gain.
However, the PBOC announced an increase in banks’ foreign-exchange reserve requirement ratio from 4% to 6%, effective November 15.
The adjustment interrupted the onshore yuan’s 13-session winning streak, its longest since 1996.
Despite the recent pullback, the Chinese currency remained approximately 5% stronger for the year.
Australian Dollar Falls Despite Stronger Trade Data
The Australian dollar weakened 0.3% to $0.6914, even after economic data showed an improvement in the country’s trade balance.
Australia recorded a September trade surplus of A$2.83 billion, supported by a 2.3% increase in exports and a 3.3% decline in imports.
Nevertheless, the stronger trade figures failed to provide lasting support for the currency.
Investors remained cautious following the Reserve Bank of Australia’s fifth interest rate increase of the year, which lifted its benchmark policy rate to 4.85%, the highest level in 18 years.
The elevated borrowing costs have created additional uncertainty about Australia’s economic outlook and the future direction of monetary policy.
British Pound and Euro Show Relative Resilience
European currencies displayed comparatively stronger performance despite the volatility affecting Asian markets.
The British pound briefly climbed to a seven-week high of $1.3503 before the Bank of England announced a 25-basis-point interest rate increase.
The decision lifted the central bank’s benchmark rate to 4%, with policymakers voting 8-1 in favor of the move.
Meanwhile, the euro was heading toward a weekly gain of approximately 0.5%, potentially ending two consecutive weeks of losses.
US Jobs Report and Inflation Data in Focus
Investors are now turning their attention to upcoming US economic releases for further guidance on the Federal Reserve’s interest rate policy.
Friday’s October employment report is expected to show a recovery in job creation following September’s modest increase of 29,000 positions.
DBS forecasts approximately 100,000 new jobs, while the FactSet consensus points to a smaller gain of 65,000.
Stronger employment figures could influence expectations for future interest rate decisions, while weaker results may revive concerns about the strength of the US economy.
Investors will also closely monitor next week’s inflation data for indications that price pressures are easing.
With technology stocks experiencing heightened volatility and monetary policy uncertainty persisting, Asian currencies could remain sensitive to changes in global risk appetite.
