(MENAFN- AFP) Stock markets headed south once more Thursday on worries over the economic outlook, notably because of a possible Brexit, triggering a rush for haven investments like the yen and gold.
Europe's main stock markets were down around half a percent in early afternoon deals after Tokyo dived 3.1 percent by the close, one week before a knife-edge referendum on Britain's membership of the European Union.
Federal Reserve boss Janet Yellen on Wednesday sounded a fresh warning over a possible British exit from the EU, while the yen soared to a 22-month dollar high Thursday as the Bank of Japan failed to pump up its stimulus.
Gold meanwhile hit a near two-year high.
"Brexit concern has been brought back to the fore," said Jasper Lawler, analyst at CMC Markets trading group.
He added that policy decisions from the Federal Reserve and the Bank of Japan had also unnerved markets.
The Fed on Wednesday lowered its growth forecasts for this year and the following two, and flagged interest rates rises to be lower and slower, highlighting increasing concern about the US and wider global economic outlook.
Thursday saw the Bank of England leave its main interest rate at 0.5 percent, while the BoE also maintained the amount of its cash stimulus pumping around the economy.
"The outcome of the referendum continues to be the largest immediate risk facing UK financial markets, and possibly also global financial markets," read minutes from the BoE's June meeting, which added that "were the UK to vote to leave the EU, sterling's exchange rate would fall further, perhaps sharply".
- Yellen warnings -
Yellen's comments meanwhile dragged New York stocks lower Wednesday.
In a news conference after the Fed kept interest rates unchanged, Yellen voiced confidence in the US economy but said there were concerns about the impact a British exit would have across the world.
"Clearly, this is a very important decision for the United Kingdom and for Europe," she told reporters.
"It is a decision that could have consequences for economic and financial conditions in global financial markets. If it does so, it could have consequences in turn for the US economic outlook."
The news put downward pressure on the dollar versus the yen, and that was compounded Thursday when Japan's central bank held off boosting its stimulus programme, despite stuttering economic growth at home and uncertainty overseas.
The dollar fell to 103.55 yen after the BoJ wrapped up its two-day policy meeting -- its lowest since August 2014. The euro fell to 116.92 yen, a three-and-a-half-year low.
That hammered Japan's exporters, sending the Nikkei stock index diving more than three percent.
The dollar rebounded in European trading hours and was up sharply against the pound, while investors seeking safety continued to throw money at other haven assets such as German government bonds and gold.
The precious metal hit $1,313.65 an ounce Thursday -- the highest level since August 2014.
- Key figures around 1100 GMT -
London - FTSE 100: DOWN 0.6 percent at 5,931.25
Frankfurt - DAX 30: DOWN 0.7 percent at 9,537.35
Paris - CAC 40: DOWN 0.5 percent at 4,152.14
EURO STOXX 50: DOWN 0.6 percent at 2,814.26
Tokyo - Nikkei 225: DOWN 3.1 percent at 15,434.14 (close)
Shanghai - Composite: DOWN 0.5 percent at 2,872.82 (close)
Hong Kong - Hang Seng: DOWN 2.1 percent at 20,038.42 (close)
New York - DOW: DOWN 0.2 percent at 17,640.17 (close)
Euro/dollar: DOWN at $1.1186 from $1.1263 late Wednesday
Pound/dollar: DOWN at $1.4108 from $1.4212
Dollar/yen: DOWN at 104.26 yen from 105.98 yen
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.