The Federal Reserve Bank of New York reported after the bell Thursday that it provided $200 million of liquidity to the Swiss National Bank, via its swap lines for foreign central banks, a facility it reopened in May, 2010. This is the first time since March that the Fed provided liquidity. The Swiss have been battling the effects of a rising franc, sought by the world as a safe haven currency as Europe deals with its credit and banking issues.
The S&P 500 tumbled and money continued to flow into Treasuries, driving yields lower. In fact, the yield on the 10-year note closed the day at 2.08, which matches the all-time low set on December 18, 2008, during some of the darkest days of the Financial Crisis.
Japanese Finance Minister Yoshihiko Noda said on Friday that the government and the Bank of Japan would take appropriate action against the yen’s rise while remaining in close communication.
He said he believes the Bank of Japan is considering various options to support the economy but declined to comment on specific monetary policy moves.
Noda also told reporters after a cabinet meeting that the current yen rise has been driven in part by speculative moves
The U.S. dollar was holding modest gains in Asia on Friday, after a raft of weak U.S. economic data and concerns about European banks sent skittish investors piling into Treasuries.
Rising fears of another global recession hammered stocks, with the Nasdaq plunging more than 5 percent, while European equities suffered their biggest daily fall in 2.5-years as banks took a beating.
The dollar index .DXY, which tracks its performance against a basket of major currencies, rose 0.2 percent to 74.371, though these gains were somewhat grudging as the United States has plenty of its own troubles.