The Japanese Yen surged unexpectedly right after the ruling party's historic defeat in the Senate election on July 20.
After declining for two consecutive weeks due to concerns about the government's loss of majority under Shigeru Ishiba, the Yen quickly rebounded thanks to its role as a safe asset amidst ongoing global tensions and increasing trade pressures from Washington.
MAIN CONTENT
The Japanese Yen surged due to its role as a safe-haven currency despite Japan's political instability.
The People's Bank of China maintains loan interest rates, upholding a cautious policy.
The Singapore Dollar weakens due to pressure from the United States threatening new tariffs, while stocks continue to rise.
Why did the Japanese Yen unexpectedly appreciate after the election defeat?
Financial experts state that the Japanese Yen benefits from its safe-haven asset status during global market volatility, despite Ishiba's ruling party suffering a painful defeat in the elections. JP Morgan reports that this trend reflects investors' confidence in the Yen amidst political instability.
Before the election, the Yen declined due to predictions that Ishiba would lose the majority, but after the actual results, investors quickly returned to buying to shelter their capital. The value of the Yen increased by 0.22% to 148.49 against the USD at 11 AM Tokyo time.
The Yen is still regarded as a store of value during periods of global instability, especially when trade tensions rise.
Michael Wilson, Head of U.S. Strategy, JP Morgan, July 21, 2025
How does the People's Bank of China maintaining interest rates impact the situation?
The People's Bank of China decided to maintain the status quo on the one-year and five-year loan interest rates on July 21, showing a cautious stance in stimulating the economy amid external risks.
The minutes indicate that the government is focusing on financial stability rather than expanding stimulus. This caused the offshore Yuan exchange rate to increase slightly by 0.02%, reaching 7.1788 Yuan/USD at 9:50 AM local time.
Reaction of the stock markets in China and Hong Kong
The Hang Seng Index and CSI 300 rose by 0.55% and 0.28% respectively at the market opening, reflecting a cautiously optimistic sentiment following the decision to keep interest rates unchanged.
Hong Kong analyst John Lee commented that investors remain cautious about the risk of unusual trade from abroad, especially from the U.S.
Who is affected in Singapore when the USD rises and U.S. tariff pressures increase?
The Singapore Dollar depreciates due to pressure from the strength of the USD and the risk of new tariffs targeting the pharmaceuticals and semiconductors sectors—two key export industries of the island nation.
Barclays Plc and Asia Decoded forecast that the Monetary Authority of Singapore may ease its exchange rate policy this month to mitigate adverse impacts.
We closely monitor Singapore's monetary policy, ready to adjust to protect the economy from external shocks.
Daniel Goh, Barclays banking economist, July 2025
Stock and cryptocurrency developments in Singapore and India
The Straits Times Index of Singapore continues its 11-session winning streak, reaching a new high of 4,225.79 points before slightly retreating to 4,215.22 points at 10:10 AM. The power, finance, and real estate sectors lead the gains.
In contrast, India's Nifty 50 index decreased slightly by 0.26%, reflecting a mixed market sentiment in the region.
Bitcoin rose 0.21%, reaching $118,368.56 (Singapore time), retaining cryptocurrency investors despite the market's volatility last week.
Frequently Asked Questions
What makes the Japanese Yen considered a safe asset?
The Japanese Yen is seen as a safe asset during market volatility due to its stable economy and traditional role in hedging global financial risks.
Why does the People's Bank of China maintain interest rates?
The Central Bank aims to maintain financial stability and be cautious of economic fluctuations, not wanting to impact policies to stimulate the economy immediately.
What is the impact of the U.S. threatening new tariffs on the Singapore Dollar?
Tariff threats increase trade risks, causing the Singapore Dollar to face downward pressure due to significant impacts on the exports of two key sectors.
How do Singapore and Indian stocks react to global factors?
Singapore rises thanks to a solid basic sector, while India slightly declines due to mixed and cautious market sentiment.
How do cryptocurrencies like Bitcoin move in this context?
Bitcoin experienced slight volatility and increased slightly to retain investor interest, indicating stable recovery after complex cryptocurrency market developments.
Source: https://tintucbitcoin.com/yen-va-co-phieu-a-tang-manh/
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