The yen rose for the first time in seven days against the dollar after a New York City doctor tested positive for Ebola, boosting demand for haven assets.
Japan’s currency strengthened versus all except two of its 16 major counterparts as the diagnosis is the first of the deadly disease to be made in the most populous U.S. city. Treasuries advanced, while futures on the Standard & Poor’s 500 Index of shares declined. A gauge of the dollar dropped from a two-week high.
“We’re seeing a fall in equity futures and dollar-yen on fears of a potential pandemic,” said Greg Gibbs, the head of Asia-Pacific markets strategy at Royal Bank of Scotland Group Plc in Singapore. “There is a bubbling fear percolating in the background. Ebola is certainly on the market’s radar.”
The yen rose 0.2 percent to 108.02 per dollar at 6:31 a.m. in London after sliding to 108.35 yesterday, the weakest level since Oct. 8. Japan’s currency climbed 0.1 percent to 136.73 per euro. The dollar depreciated 0.1 percent to $1.2656 per euro.
The doctor, Craig Spencer, is being treated in an isolation unit at Bellevue Hospital Center in Manhattan. The diagnosis was made by the New York City Department of Health & Mental Hygiene and announced by Mayor Bill de Blasio at a news conference. Blood samples will be sent to the U.S. Centers for Disease Control and Prevention in Atlanta for confirmation, the CDC said. The case was earlier reported by the New York Times.
The Bloomberg Dollar Spot Index, which measures the U.S. currency against a basket of 10 counterparts, declined 0.1 percent to 1,068.75 after rising to 1,070.57 yesterday, the highest since Oct. 7.
Yen’s Advance
Concern that Ebola is spreading has combined with signs that global growth is losing momentum to revive demand for safer assets. The yen has gained 2.5 percent in the past month, the best performer of 10 developed-market currencies tracked by Bloomberg Correlation-Weighted Indexes. The dollar rose 1.4 percent and the euro advanced 0.4 percent.
“If Ebola concerns begin to infect broader markets, expect the yen to pull higher against its peers,” Emmanuel Ng, a Singapore-based currency strategist at Oversea-Chinese Banking Corp., wrote in a client note. The yen “may anchor itself around the 108 neighborhood pending global news flow but if it becomes unhinged at this level, expect a test towards 107.60” per dollar, he wrote.
The yen slumped 5.1 percent against the dollar in September, its biggest monthly loss since January 2013, and depreciated to 110.09 per dollar on Oct. 1, the lowest level since August 2008.
Japan isn’t trying to weaken its currency, Finance Minister Taro Aso said today in Tokyo. Raising the sales tax as planned would earn international trust in the country, he said.
To contact the reporters on this story: Candice Zachariahs in Sydney at czachariahs2@bloomberg.net; Kevin Buckland in Tokyo at kbuckland1@bloomberg.net
To contact the editors responsible for this story: Garfield Reynolds at greynolds1@bloomberg.net Nicholas Reynolds
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