Yen Ignores Regional Equity Crash, Relying on Cheap Funding

The Japanese Yen has remained surprisingly calm despite a recent crash in regional equities. The USD/JPY exchange rate held steady at around 164.00, just below its weakest level against the Dollar since 1986.

The Nikkei 225 fell nearly 4%, while Korea's benchmark dropped close to 11% after a report that a Chinese manufacturer has begun mass production of lithography equipment long monopolized by a single Dutch supplier.

This has sparked concerns about the Yen's role as a safe-haven currency, as it failed to rally in response to the equity shock. The Bank of Japan's decision on Friday is fully priced, leaving Wednesday's Federal Reserve decision as the only key event for the pair.