Yen Slumps to 40‑Year Low Amid Global Market Turmoil

Yen Slumps to 40‑Year Low Amid Global Market Turmoil

Market Overview and Key Developments

A look at the day ahead in European and global markets from Gregor Stuart Hunter

Yen’s Decline and International Response

The yen is again hovering near its weakest level in four decades, with the prospect of coordinated intervention growing after Japan’s finance minister and the U.S. Treasury secretary met online to discuss global financial conditions.

In Asian morning trading on Tuesday, the yen was at 161.60 per dollar, its lowest point in two years, after briefly touching levels not seen in decades during U.S. trading hours.

Policy Actions and Market Impact

Interventions by the Ministry of Finance since April and recent rate hikes by the Bank of Japan have done little to halt the currency’s slide.

Regional Market Movements

South Korea and Asia‑Pacific Indices

South Korean equities fell more than 6% after finance minister Koo Yun‑cheol described the current exchange rate of roughly 1,500 won per U.S. dollar as “excessive.” The KOSPI, which had closed at a record high on Monday, triggered a brief trading halt and pulled MSCI’s broadest Asia‑Pacific index outside Japan down 1.5%.

Japan’s Nikkei and Economic Data

The Nikkei 225 slipped 1.2%, ending an eight‑day winning streak, even as June manufacturing data showed robust growth, with new‑order activity reaching its fastest pace in over four years.

Commodities and Global Indices

Oil Prices and Geopolitical Developments

Brent crude fell 0.4% to $77.56 a barrel after the United States granted a 60‑day sanction waiver for Iran, following the first talks under a fledgling peace agreement. Officials also reported a sustained lull in fighting in Lebanon under a regional cease‑fire accord.

Stock Futures in the U.S. and Europe

S&P 500 e‑mini futures dropped 0.5%, extending losses after technology megacaps pressured Wall Street on Monday.

Early European trading saw pan‑region futures down 0.6%, German DAX futures down 0.7%, and FTSE futures down 0.8%.

Key Events to Watch

Company Earnings

Major Reports Scheduled

FedEx, Cerebras Systems, Carnival Corp

Economic Events

Europe and UK Economic Indicators

France: Business Climate for June, S&P Manufacturing Flash PMIs for June

Germany: S&P Flash PMIs for June

Euro zone: S&P Flash PMIs for June

UK: Flash PMIs for June and CBI Trends for June

Debt Auctions

German Government Debt

Germany: 2‑year government debt

(Reporting by Gregor Stuart Hunter; Editing by Jamie Freed)

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