The yen advanced the most in more than three weeks against the dollar as a slump in China’s currency and its stock market stoked concern growth in the world’s second-biggest economy is slowing.
Japan’s currency gained versus most of its 16 major peers on demand to unwind carry trades while the yuan tumbled the most in more than five years on bets the central bank wants an end to the currency’s gains. Demand for the less-risky currencies rose after a Russian official said Ukraine faces a “high” chance of defaulting on its sovereign debt. South Africa’s rand reached a six-week high as a report showed the economy grew more than forecast in the fourth quarter.
“Risk aversion continues to play a role in dollar-yen,” Robert Sinche, a global strategist at Pierpont Securities Holdings LLC in Stamford, Connecticut, said in a phone interview. “It’s a bit surprising, given there’s been some big moves happening in China and other markets,” that moves in the currencies market are limited, Sinche said.