Affected by the non-performing loan issues of two US banks, global safe-haven demand has surged.

BlockBeats News, October 17, Friday, the Japanese Yen continued to strengthen, causing the US Dollar to fall below the 150 level, sliding from its eight-month high, due to two US banks reporting bad loans, driving global demand for safe-haven assets.

The Yen outperformed most G10 peers on Friday, with the US Dollar falling over 0.5% against the Yen to around 149.63 as of the time of writing, marking its lowest level since October 6. The Swiss Franc also rose, while the US Dollar and US Treasury yields both declined amid a selloff in regional bank stocks.

Strategist Mark Cranfield pointed out that looking back at foreign exchange traders in 2023, they would note that during the regional banking crisis at that time, the US Dollar to Yen exchange rate fell by about 800 pips from peak to trough. If a similar situation occurs this time, it means that the currency pair will fall to the 146 area low this month. The key driver once again is the sharp drop in US Treasury yields, with the 2-year US Treasury yield falling to levels seen three years ago. As traders price in the likelihood of the Fed's target rate reaching 3%, there is still ample downside room for overshooting.