TOKYO: The yen rallied on Monday in Asia while emerging currencies slumped after the collapse of weekend talks between key producers in Doha aimed at capping output.
Hopes had been high that a deal could be reached to address a global crude glut that has hammered the commodity for the past two years, battering world markets and energy companies.
But Saudi Arabia said it would not take part in a collective freeze that did not include major rival Iran. Tehran had refused to join in as it has only recently resumed exports after the lifting of Western nuclear-linked sanctions.
The news led to a rush for safe investments, with the yen—a go-to asset in times of turmoil and uncertainty—surging against the greenback, while commodity-linked currencies dived.
The dollar fell to 108.01 yen from 108.75 yen Friday in New York, while the euro slipped to 121.93 yen from 122.71 yen. The single currency was at $1.1283 from $1.1284.
The oil-dependent Malaysian ringgit sank 0.94 percent while Australia’s dollar — which also relies on commodity sales—shed 0.73 percent.
The South Korean won, Indonesia’s rupiah, the Thai baht, the Philippine peso and the Taiwan and Singapore dollars all retreated against the dollar.
“Lack of agreement from Doha has hit commodity currencies lower,” Robert Rennie, the global head of currency and commodity strategy at Westpac Banking in Sydney, told Bloomberg News.
“The prospects of another near-term round of talks appear limited” ahead of the June meeting of the OPEC crude exporters grouping.
High hopes for the output talks had driven oil prices and risk sentiment higher over the past weeks, Jo Horton, a Sydney-based senior economist at St George Bank, said.
“To see that coming to no agreement over the weekend was really disappointing for markets,” Horton said.
The yen was also supported by comments from G20 finance chiefs on Friday reiterating a pledge to refrain from competitively easing their currencies. AFP