The Japanese yen, which had strengthened significantly, steadied against the dollar, while the Swiss franc also softened. The dollar was trading at 144.75 yen, up 0.3 per cent on the day. This marked the first day of gains for the dollar against the yen this month, although it remains down 10 yen from its peak last week. Equity markets also showed signs of recovery. Japan's Nikkei index rebounded by 10 per cent after plunging 12 per cent the previous day. European stocks were also attempting to regain lost ground. "Our view is that markets got a bit ahead of themselves and they've come in this morning and realised that, and that's why we've seen the dollar pick up and dollar/yen retrace higher," said Nick Rees currency analyst at Monex Europe. The recent surge in the yen was primarily driven by a combination of factors, including increased market volatility, the unwinding of popular carry trades, and the Bank of Japan's (BOJ) decision to raise interest rates last Friday. Additionally, weaker-than-expected US job data and disappointing earnings from major tech companies triggered a global equity sell-off, further exacerbating the carry trade unwind. The Swiss franc, another popular funding currency for carry trades, also weakened on Tuesday. The dollar rose 0.45 per cent to 0.85545 francs. The euro and pound also declined against the dollar, with the common currency down 0.24 per cent to $1.0926. Sterling fell 0.3 per cent to $1.274. Attribution: Reuters
