Yen rises to 4-week high versus dollar, Aussie strengthens

The Japanese yen has strengthened to its highest level in four weeks versus the US dollar in forex trading markets today (October 13th), with investors turning to the currency as a safe-haven investment amid fears of a slowdown in global economic growth.

Over the weekend, officials from the Federal Reserve indicated the lack of progress worldwide may impact on the central bank's interest rate outlook, potentially delaying its action to lift borrowing costs.

Vice chairman Stanley Fischer acknowledged the eventual hike will have a significant global economic and financial impact, but insisted the Fed will use clear communication in an effort to limit the shock to markets.

He confirmed the bank will hold off on raising rates from current record-low levels until it is certain the US economy - the world's largest - has "advanced far enough" to withstand the action and continue to make progress on labour market and inflation goals.

Speaking during the International Monetary Fund's (IMF's) annual meeting in Washington, Mr Fischer said: "If foreign growth is weaker than anticipated, the consequences for the US economy could lead the Fed to remove accommodation more slowly than otherwise."

While markets in Tokyo have remained closed for a national holiday today, the gauge of Asia-Pacific shares excluding Japan have extended a five-week losing streak. 

Investors have also expressed concerns regarding progress in the eurozone, with official figures published last week showing exports in Germany - the region's largest economy - declined by 5.8 per cent in August, while the country's industrial output was also much lower than anticipated.

Last week, the IMF reduced its global economic growth forecasts for the third time this year and also warned worldwide growth may never recover to its pre-recession levels.

However, above-estimate trade data out of China caused the Australian dollar to surge, adding 0.45 per cent versus its US counterpart. The Asian nation's strong performance is particularly important to Australia as it is the country's largest trading partner.