The Japanese yen rallied to a 15-month high against the U.S. dollar on Wednesday, breaking through a closely watched technical and psychological level at ¥107 for the first time since November of 2016. Wednesday’s move highlights a relatively rapid strengthening for the Japanese currency, after the dollar-yen pair crossed a key level at ¥108, about 24 hours ago. Currency strategists have interpreted the yen’s moves as a sign that volatility from recent stock-market gyrations is spilling over in to the currency market. Japan’s currency is considered a haven during times of uncertainty and risk aversion, explaining its attractiveness to investors who are still determining whether the recovery in equities is here to stay. Moreover, Japanese market participants, who are the biggest holders of dollar-denominated debt, have liquidated their holdings amid the selloff and repatriated those assets in to yen, analysts said. That currency repatriation has weighed on the greenback against its Japanese counterpart. Earlier on Wednesday, data also showed that Japan has had the longest economic growth spell in 28 years, last recording an annualized 0.5% bump in the fourth quarter of 2017, which also helped the yen higher. One dollar last bought ¥107.07, down 0.7% since Tuesday, after hitting a session low of ¥106.72 earlier. The dollar-yen pair is on track for a weekly drop of 1.9%, its biggest since early Sept. 2015, according to FactSet.
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