The Japanese yen soared in early Asian trading on Thursday as the break of key technical levels triggered massive stop-loss sales of the U.S. and Australian dollars in very thin markets.
The dollar collapsed to as low as 105.25 yen on Reuters dealing JPY=D3, a drop of 3.2 percent from the opening 108.76 and the lowest reading since March 2018. It was last trading around 107.50 yen.
Analysts said the rot began when tech bellwether Apple Inc (AAPL.O) shocked investors by cutting its earnings guidance, citing sluggish iPhone sales in China.
The news sent U.S. stock futures sliding and sparked a rush of funds to safe-haven bonds.
With risk aversion high, the safe-haven yen was propelled through major technical levels and triggered massive stop-loss flows from investors who have been short of the yen for months.
The move was exacerbated by a dearth of liquidity, with Japan still on holiday after the New Year, and by automated algorithmic trades which are carried out by computers in micro seconds.