Asia markets traded higher on the final day of the week but were set for weekly losses as investors moved to safe haven assets amid concerns surrounding key central bank decisions and the U.K.'s upcoming June 23 referendum vote on its future within the European Union. The British pound rose 0.4 percent to $1.4255 GBP following yesterday’s shooting of pro-membership MP Jo Cox which could generate sentiment in favor of remaining in the EU.
The dollar/yen currency pair traded as low as 103.58 after yesterday’s BOJ decision to leave interest rates steady. As of 11:48 a.m. HK/SIN on Friday, the pair was at 104.35. The yen also weakened against other major crosses, with the euro/yen at 117.54, up from lows around 115.46 on Thursday.
Major Japanese exporters rallied on Friday as a relatively weaker yen is a positive for exporters as it increases their overseas profits when converted to local currency.
Some analysts saw Thursday's moves in dollar/yen and euro/yen as due largely due non-Japanese factors.
According to Michael Sneyd, a foreign exchange strategist at BNP Paribas, "We see expectations of Fed rate hikes as the main driver of the dollar/yen. … the fall in the euro/yen pair in part reflects increased uncertainty related to the U.K.'s upcoming referendum on EU membership."
Asian Shares
Japanese shares received a boost from the weaker yen, as the benchmark Nikkei 225 was up 1.54 percent. Australia's ASX 200 added 0.24 percent in morning trade, boosted by a 0.6 percent advance in the financials sub-index, which accounts for nearly half of the broader index. In South Korea, the Kospi was up 0.23 percent; Hong Kong's Hang Seng index added 0.78 percent.
Chinese mainland shares traded higher, with the benchmark Shanghai composite up 0.69 percent and the Shenzhen composite adding 1.05 percent.