Yen Surges on Another Day of Stock Market Crash

The Japanese yen surges across the board in US session following another day of crash in the US stock markets. S&P 500 tumbles 6.7% to 752.44, breaking though 2002 bear market low of 776.76 and made a new 11 year low. After more than a month of consolidation, DOW finally broke 7884 low in Oct 10 and close at 7552. Crude oil dives following stocks and takes out 50 psychological level to as low as 48.52. The Japanese yen strengthens against other majors currencies on risk aversion and such strength should likely continue in Asian session as another round of global stock markets selloff might be seen.

Technically, speaking, GBP/JPY led the way by breaking through Oct's low, confirming that recent down trend from 251.09 has resumed for next target of 200% projection of 215.87 to 184.47 from 197.42 at 134.62. USD/JPY, EUR/JPY and AUD/JPY is trading well below near term support of 94.47, 117.67 and 59.87 respectively, suggesting that further fall is underway to test last month's low.

Dollar is generally firm across the board except versus the yen. Most noticeably, USD/CHF continues to be the stronger one and has met mentioned projection target of 1.2261 already. USD/CAD is back pressing 1.3015 high and is likely resuming the medium term up trend. EUR/USD, GBP/USD and AUD/USD is heading to retest recent low.

Data released from US saw initial claims surged again to 542k, highest level since 1992. Continuing claims rose above 4m to highest level since 1982.Philly Fed index hit lowest level since 1990 at -39.3 in Nov. Leading INdicators dropped more than expected by -0.8% in Oct. Canadian wholesale sales unexpectedly rose 1.5% mom in Sep. UK retail sales fell for a second consecutive months by -0.1% mom in Oct. Though, the data was much better than expectation of -0.9%. Swiss Trade surplus widened to 1.84b in Oct. Germany PPI was flat in Oct, with year-over-year rate moderated from 7.8%. Japanese trade balance turned deficit again to -63.92b in Oct.

The SNB cut three-month Libor rate by 100bps to 0.5-1.5% in another unscheduled meeting today. The effective mid point is thus lowered to 1.00%. The bank acknowledged that "International economic conditions have worsened appreciably, bringing a higher risk of a marked slowdown in economic activity in Switzerland next year." Also the bank promised a "generous and flexible" supply of Swiss Franc to the markets.