Yen hits five-week high as AI selloff drives haven flows, yields fall

The yen extended its rally into the US close, jumping to a five-week high as traders moved into safe havens, according to Investing.com. The driver was a deeper selloff in technology stocks: investingLive reports the Nasdaq sank as AI worries bit and chip stocks tumbled.

This morning the yen was at a three-week high. By the end of the US session the move had stretched further, and US Treasuries kept rallying. Investing.com reports that the US 10-year yield closed at a one-month low on safe-haven demand.

What moved and why

investingLive's Americas wrap says US 10-year yields fell near the 5% level, "but it's for the wrong reasons", pointing to risk aversion rather than a better inflation outlook. The same wrap argues that evidence is mounting that the US dollar is leveraged to the AI trade, and that crude oil buyers remain in control. Earlier, investingLive's European session wrap noted oil rising as hopes for a deal faded amid prospects of another US attack on Iran. It also reported gold falling below $4,100 and EUR/CHF dropping to three-month lows as French bond turmoil weighed.

US data did not change the mood. Initial jobless claims came in at 194,000 against a 200,000 estimate, investingLive reports, while continuing claims rose to 1.728 million versus 1.720 million expected. A $26 billion sale of five-year TIPS tailed by 0.7 basis point at a high yield of 2.367%, with a bid-to-cover of 2.41 against a 2.52 average.

The majors

ECB reference rates from the 2026-10-22 fixing, compared with the 2026-10-21 fixing:

The fixings show a classic risk-off split. The dollar firmed against the euro, the pound, the Aussie and the kiwi, but lost ground to the yen and the Swiss franc. USD/JPY posted the largest move among the majors. The Mexican peso was the clear loser; our sister site explains why emerging-market currencies like the peso suffer more in risk-off moves. Track the yen on the USD/JPY chart.

Central banks and data in the news

Canada

The loonie held up better than most. Investing.com reports the Canadian dollar strengthened on oil prices and Bank of Canada hike bets. September producer prices rose 2.0% m/m after 1.3%, and 14.5% y/y, according to investingLive, which says markets price an 80% chance of a BoC hike on October 28.

Australia

The Australian flash PMI showed the private sector shrinking for the first time in five months while prices rose, investingLive reports. It calls this a difficult mix for rate expectations that could add volatility to the Aussie.

Japan

Ahead of Friday's CPI, investingLive's preview says core inflation is seen at 2.1%, above the BoJ target for the first time since December. It notes USD/JPY has held a range between just under 157 and just under 159 this month, with the 200-day EMA just above 157.50.

What to watch next

• Japan September CPI (Friday, October 23): the main event in Asia, per investingLive's calendar. The preview says a firm print would test the lower end of the USD/JPY range, while a soft one would push the pair back toward 159, where intervention risk becomes the yen's main defence.
• Bank of Canada (October 28): markets price an 80% chance of a hike, according to investingLive.
• AI stocks and Treasuries: whether the tech selloff and the bond rally extend will shape haven demand for the yen and the franc.