By Alun John

HONG KONG, (Reuters) – The yen maintained most of its overnight gains Friday after falling U.S yields and market jitters supported the Japanese currency. A Wall Street selloff drove dollar to dollar flight-so safety, where it remains close to 20-year highs.

On Friday, the yen traded at 129.14 dollars per dollar. This was a slight decline from its peak of 127.5 overnight two weeks ago.

The dollar/yen’s biggest percentage drop this year was Thursday’s 1.2% plunge. As the euro/yen exchange fell 2.5% daily, it was the largest percentage drop since 2016, as common currency became a victim to the “risk-off” mood.

Alan Ruskin (macro strategist at ANA) said that the yen “is perhaps the most evident signal of a change from a global where yields were dominant (yen-negative), to one where risk was resilient and yields were strong (yen-positive).” Deutsche Bank In a note, (ETR:).

This week’s benchmark U.S. 10-year yield fell from Monday’s record of 3.203% to 2.8822%.

The yen weakened this year due to rising U.S yields, at a moment when the Bank of Japan intervened to maintain Japanese benchmark yields.

Investors continue to shift towards safer assets, fearing that central bank rate increases to limit inflation will hit global economic growth. Meanwhile MSCI’s gauge for stocks across the globe fell overnight to its lowest point since November 2020.

The Fed’s benchmark overnight rate was raised by 50 basis points, which is the biggest increase in 22 years. Investors now want to know how aggressive central bank policy will be.

CME’s FedWatch Tool shows that expectations for an additional hike of at most 50 basis points are priced in.

At $1.038, the euro was close to its 2017 low at $1.034. This would mark its lowest level in almost 20 years.

Weak euro kept the currency at 104.75, just below its overnight peak of 104.92 (20 years ago).

Sterling was content to settle at $1.2206 while the dollar dropped to $0.6887.

After a turbulent week, crypto markets settled down on Friday. This was due to the combination of a risk-off attitude and the collapse of TerraUSD.

This sell-off has brought the total market value for all cryptocurrency to $1.2 trillion. That’s less than half what it was in November last year, according to CoinMarketCap data. It also sent bitcoin down to $25,401.05 Thursday, which is its lowest point since Dec. 28, 2020.

Things were quieter on Friday morning, with bitcoin trading at $29,000.