Japanese Yen Jumps While Dollar Dives on Pessimistic Vaccine Outlook

Moderna CEO says new COVID-19 vaccines may be needed to counter Omicron
By Katabella Roberts
Katabella Roberts
Katabella Roberts
Katabella Roberts is a reporter currently based in Turkey. She covers news and business for The Epoch Times, focusing primarily on the United States.
November 30, 2021 Updated: November 30, 2021

The Japanese yen jumped toward 113 against the U.S. dollar on Tuesday while the greenback slid against its rivals after Moderna CEO Stephane Bancel said COVID-19 vaccines are unlikely to be as effective against the Omicron variant of the CCP virus as they have been with other types.

In an interview published on Tuesday, Bancel said he predicts the current vaccines will be far less effective against the new Omicron variant of COVID-19 due to the high number of mutations on the spike protein.

COVID-19 is the disease caused by the CCP (Chinese Communist Party) virus.

“There is no world, I think, where [the effectiveness] is the same level … we had with Delta,” Bancel told the Financial Times. “I think it’s going to be a material drop. I just don’t know how much because we need to wait for the data. But all the scientists I’ve talked to … are like ‘this is not going to be good.'”

Bancel added that the high number of mutations on the protein spike the virus uses to infect human cells meant it was likely the current crop of vaccines would need to be modified.

The U.S. dollar weakened 0.3 percent versus its rivals on Monday after the interview was published while the Japanese yen climbed 0.4 percent versus the dollar to its highest levels since early November at ¥112.95, driven in part by investors turning to safer assets.

Currently, the yen is trading at ¥112.88 to the U.S. dollar.

In another sign of a pivot away from riskier assets and toward safe havens, yields on the 10-year U.S. Treasury note slumped over 7 basis points and those on the 30-year U.S. Treasury bond fell by over 4 basis points. Yields move in the opposite direction to prices, with the moves indicating investor interest in haven assets.

European stocks also saw declines on Tuesday, with the pan-European STOXX 600 index, Germany’s DAX, and France’s CAC 40 falling over 1 percent in early trading.

Meanwhile, the Swiss franc rose to a two-week high versus the U.S. dollar while it held within a striking distance of a July 2015 low against the euro.

Japanese Prime Minister Fumio Kishida said on Monday that the country will temporarily suspend new arrivals of all foreign visitors from Nov. 30 onward to prevent the spread of the Omicron variant, which was first identified in South Africa.

But on Tuesday, the country confirmed its first case of the new variant involving a man who traveled from Namibia on Sunday and arrived at Narita Airport, outside of Tokyo, Bloomberg reports. There are no other reports of suspected cases, Chief Cabinet Secretary Hirokazu Matsuno told reporters.

U.S. Federal Reserve chair Jerome Powell has said the emergence of the new variant poses a risk to employment and inflation in the country.

In prepared public remarks that will be delivered before the Committee on Banking, Housing, and Urban Affairs and Senate lawmakers on Tuesday, Powell did not mention any proposed monetary policy actions by the central bank or whether officials are considering changing the pace of the tapering of its asset purchases after policymakers unanimously decided at last month’s meeting to begin dialing them back.

“The recent rise in COVID-19 cases and the emergence of the Omicron variant pose downside risks to employment and economic activity, and increased uncertainty for inflation,” Powell said in prepared testimony.

“Greater concerns about the virus could reduce people’s willingness to work in person, which would slow progress in the labor market and intensify supply-chain disruptions,” the chairman added.

Tom Ozimek and Reuters contributed to this report.

Katabella Roberts is a reporter currently based in Turkey. She covers news and business for The Epoch Times, focusing primarily on the United States.