Yen Rises as Falling Chinese Stocks Spur Demand for Haven Assets

The yen gained against all of its major counterparts as stocks in China headed for their biggest drop since 2009, spurring demand for haven assets. Japan’s currency approached a three-month high against the euro after China suspended three of the nation’s biggest brokerages, including Citic Securities Co. and Haitong Securities Co., from adding margin-finance and securities lending accounts following rule violations. The euro is down this month against major peers after the Swiss National Bank decided to abandon the franc’s cap versus the euro. “The slide in Shanghai stocks is leading to yen buying,” said Yuji Saito, director of foreign exchange at Credit Agricole SA in Tokyo. “With risk sentiment deteriorating right now, anything obscure will lead to reducing positions.” The yen rose 0.3 percent to 117.11 per dollar at 10:53 a.m. in Tokyo from Jan. 16, and gained 0.3 percent to 135.54 per euro. The euro was little changed at $1.1570 after falling to $1.1460 on Jan. 16, the weakest since November 2003. The 19-nation currency traded at 99.54 Swiss centimes after plunging 17 percent last week. U.S. financial markets will be closed today for Martin Luther King Day. “Markets are risk sensitive,” Toshiya Yamauchi, a senior analyst in Tokyo at Ueda Harlow Ltd., a margin-trading-services provider, wrote in a note to clients. “The focus this week is whether markets can improve risk aversion amid the BOJ’s policy decision on Wednesday and the ECB’s meeting on Thursday.” To contact the reporters on this story: Chikako Mogi in Tokyo at cmogi@bloomberg.net; Kazumi Miura in Tokyo at kmiura1@bloomberg.net To contact the editors responsible for this story: Garfield Reynolds at greynolds1@bloomberg.net Naoto Hosoda, Nicholas Reynolds

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