Japanese Finance Minister Taro Aso signalled today (24 June) that his government would step in to control the huge strengthening of the yen. This comes after the Japanese currency, which has for long been considered a safe haven by investors, rallied to its highest levels since 2013 after UK decided to leave the European Union.

The yen was as high as ¥99.00 against the US dollar at one point in the day. This marked a 7.2% gain from Thursday's (24 June) closing level. It, however, lost some of the gains later in the day and was trading higher by 3.11% as of 7.55am GMT.

Apart from the yen, gold, which is considered a safe haven investment in times of turmoil, touched a two-year high. It was up 4.69% at $1,322.30 a troy ounce as of 8.52am GMT. Adrian Ash, head of research at online brokerage BullionVault.com said, "The surging gold price clearly shows the panic sweeping financial markets. It's like a bomb's gone off, particularly after everyone yesterday was taking trades off and banking on a remain."

However, all other currencies in Asia took a blow. While the Singapore dollar had declined by as much as 1.65% against the US dollar from Thursday's closing levels, the South Korean won had lost 3.22%, the Chinese renminbi had fallen 0.53% and the Indian rupee had lost 1.04% as of 7.25am GMT. This followed the pound falling to a more-than-30-year low against the US dollar and the euro falling to its lowest levels since 1999, today.

"Current exchange-rate markets are showing extremely nervous movements. In order to prevent such moves from continuing, I'll closely watch currency market moves more than ever with a sense of urgency and will respond firmly when necessary," Aso said.

Japanese yen gains while other Asian currencies slip against the US dollar amid Brexit
The yen was as high as ¥99.00 against the US dollar at one point in the day, which marked a 7.2% gain from Thursday’s closing levelReuters

Apart from Aso, the Bank of Japan governor Haruhiko Kuroda said today that the Japanese central bank was prepared to infuse ample liquidity into financial markets in order to stem the rise in the yen. He said that this could be done through the existing swap arrangements it had with other central banks.

Policy makers in Japan were concerned that the rise of its currency against the US dollar would have a negative impact on its exporters who earn revenues in the US dollar. This they fear will lead its economy back into recession.

Malaysia's Maybank told the Financial Times that leaving aside the yen, all other Asian currencies will have a negative impact following the Brexit outcome. However, among them, the bank said the Singapore dollar and Indonesian rupiah would be least affected because "the former [is] seen as a safer haven among ASEAN currencies, while the latter has so far been buffered by portfolio and direct investment flows as sentiment towards Indonesia has improved with the reformist policies of President [Joko Widodo]".

The bank added that other Asian currencies would have a negative impact because "these economies are most susceptible to risk appetite and risk-off could see flight to safety away from assets of these economies to higher quality assets."