ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailPositive ArrowIcon Print

Yen's 'flash rally' a bonanza for speculators

Stop-loss orders by retail investors and AI algos behind 4% jump on Jan. 3

The Japanese currency market is wary of possible volatility during the upcoming spring holidays.   © Reuters

TOKYO -- The Japanese yen briefly hit a nine-month high against the U.S. dollar on Jan. 3, soaring as much as 4 yen, or 3.9%, in just one minute as hedge funds and other overseas investors took advantage of thin liquidity during the New Year's holiday here.

The yen's sharp rally, or a "flash crash" in the dollar and other currencies, was driven by massive buying of the yen as a sharp rise in the Japanese currency triggered stop-loss orders from retail investors in Japan and then artificial intelligence-based trading systems worldwide.

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

Discover the all new Nikkei Asia app

  • Take your reading anywhere with offline reading functions
  • Never miss a story with breaking news alerts
  • Customize your reading experience

Nikkei Asian Review, now known as Nikkei Asia, will be the voice of the Asian Century.

Celebrate our next chapter
Free access for everyone - Sep. 30

Find out more