Yen Strengthens on French Debt Woes, Hits One-Year High Against Euro

By Kosaku Narioka

The yen strengthened to its highest level in a year against the euro as investors sought the relative safety of the Japanese currency amid concerns over French debt.

The euro fell to 175.20 yen, its lowest level since October last year, in early Asian trade Friday and was recently trading at Y175.96. The dollar fell to a five-week low of Y156.08.

French debt woes boosted so-called safe-haven assets such as U.S. Treasurys and the Swiss franc as well as the yen in recent sessions.

Concerns over France's gaping budget deficit and the risk that consumption and economic growth could be hurt by rising energy prices have fueled a selloff in French bonds and buying of U.S. Treasurys. That helped drive the 10-year U.S. Treasury yield below 5% for the first time in a month on Thursday.

Meanwhile, gains in Japanese government bond yields and domestic stocks in recent months have raised the appeal of holding Japanese assets. Inflation in the country remained relatively modest, compared with the U.S. or Europe.

Government data Friday showed Japanese consumer prices, excluding fresh food, in September climbed 2.1% compared with the same period a year earlier, after rising 1.7% in August.

French fiscal concerns boosted the Swiss franc, raising caution over possible measures from the Swiss central bank to limit the franc's appreciation and possibly shifting safe-haven flows to the yen, Kyugo Hasegawa, market economist at Mizuho Bank said in a note. Still, Japanese fiscal and monetary drivers are critical for further gains in the yen, he added.

Write to Kosaku Narioka at kosaku.narioka@wsj.com

(END) Dow Jones Newswires

October 22, 2026 23:41 ET (03:41 GMT)