Global Currency Reactions to U.S. Manufacturing Slump

The Japanese yen and Swiss franc surged against the dollar following a surprise decline in U.S. manufacturing, stirring fears of an economic downturn. The Bank of England began its interest-rate reduction, causing further shifts in global currencies. Major stocks and bond yields also experienced significant declines.

The Japanese yen and Swiss franc, considered safe-haven currencies, rose to multi-month highs against the dollar on Friday. This surge followed a surprising drop in U.S. manufacturing, raising concerns about a potential economic downturn and driving stock and bond yields downward.

In the U.K., the sterling hit a one-month low after the Bank of England commenced its interest-rate cutting cycle, a move decided by a narrow margin. The euro also faced pressure, hitting a near one-month low, following dovish remarks from the European Central Bank.

The U.S. 10-year Treasury yields experienced a significant drop, breaching the 4% barrier for the first time in six months. This came as Wall Street megacap stocks led a selloff, impacting markets in Asia with significant declines in Japan's Nikkei and South Korea's Kospi.