May 23 Thursday 11:30 GMT
The Japanese yen rallied sharply against the major currencies with Dollar-Yen dippling below 101.00 yen. The rate fell 217 points from 103.00 to 100.83 against the dollar in Europe while Euro-Yen fell 221 points from 132.16 to 129.95 driven by the sharp decline of the equities market and aggresive yen buying.
The stock market fell sharply as risk appetite waned and investors sought the safety of the Japanese yen following the weakness in China's factory activity in May and a response to Ben Bernanke's testimony yesterday that prompted speculation that the Federal Reserve Bank may soon scale back on its quantitative easing measures and trim on its bond purchases at its next policy meeting.
Japan's Nikkei 225 index fell 7.3 percent, its biggest one-day percentage drop in two years. Economy Minister Akira Amari said equity losses can boost the currency. Nikkei fell 1,143 points to 14,483.98 by 11:00am GMT.
HSBC Holdings PLC and Markit Economics survey said that China's Purchasing Manager's index of manufacturing declined to 49.6 in May from 50.4 in April. A reading below 50 indicates contraction.
The 10-year Japanese government bond yield rose to a peak of 1.0 percent for the first time since April 2012, a day after the Bank of Japan announced unprecedented bond buying. BOJ Governor Haruhiko Kuroda said that excessive bond market volatility must be avoided and he will adjust debt-buying operations as needed. The BOJ board affirmed his policy of expanding the monetary base to fuel a 2 percent inflation in two years, set on April 4