TOKYO, Oct 13 — The yen benefited from a flight to safety today as regional equities fell, while the dollar languished near three-week lows against a basket of currencies as expectations faded that the US Federal Reserve will raise interest rates this year.

Mixed Chinese trade figures released today provided little relief. Exports fell less than expected, while imports sank more than predicted.

“A lot of trading is driven by crosses today,” said Bart Wakabayashi, head of foreign exchange for State Street Global Markets in Tokyo.

“The general consensus seems to be for stronger yen, but there’s no event on the horizon that’s going to knock it out of its range for the moment,” he said.

The dollar index, which tracks the US currency against a basket of six major counterparts, edged slightly higher in Asian trade to 94.880, but remained close to its overnight low of 94.619.

Against the yen, the dollar was down about 0.1 per cent at ¥119.90 (RM4.177), still solidly in the middle of its well-worn range against the Japanese unit.

One-month dollar/yen implied volatility, which measures the cost of hedging against sharp swings in the yen, stood at 8.440 per cent today, its lowest since Aug. 21, and far below two-year highs above 13 per cent touched as recently as late August.

The euro also slipped about 0.1 per cent to 136.24 as the yen got a safe-haven lift from skidding Asian equities.

MSCI’s broadest index of Asia-Pacific shares outside Japan slipped 1.0 per cent from a two-month high touched yesterday.

The Australian dollar tumbled 0.8 per cent against the Japanese unit to ¥87.63.

It also shed 0.7 per cent against its US peer to US$0.7308 (RM3.053), down from a two-month peak of US$0.7382 touched yesterday.

The US central bank will hold just two more policy meetings in 2015, on Oct. 27-28 and Dec 15-16.

Forty-six of 66 foreign exchange strategists surveyed by Reuters last week said a further delay posed a significant risk to dollar strength and two said the risk was very significant.

Atlanta Fed President Dennis Lockhart said yesterday that the central bank will have a “lot more” data to ponder at its December review than at its meeting later this month.

Market activity was light yesterday due to the US Columbus Day holiday, which shut US bond markets. Monday was also a national holiday in Japan.

The yield on benchmark 10-year Treasuries slipped to 2.054 per cent in Asian trading from its US close of 2.099 per cent on Friday, further undermining the dollar’s appeal.

The euro was steady at US$1.1359, after scaling a three-week peak of US$1.1397 yesterday.

Yves Mersch, a European Central Bank executive board member, said today that it is too early to say whether negative factors such a slowdown in emerging market economies will derail the long-term path of inflation in the euro zone. — Reuters