The effect of ASEAN-4 stock market volatility on the Japanese yen as a safe haven asset from 2003 to 2019

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ID: 286242
2020
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Abstract
Uncertainty and volatility will always exist in the market due to it being imperfect and filled with ambiguity. That is why it is important for investors or other financiers to have a safety net or a last resort during financial instability. It is very crucial to verify and ascertain all the possible safe haven currencies in a specific country or location. This study is focus on examining how the Multivariate GARCH-BEKK model can help determine and evaluate the relation between the Japanese Yen and the stock market volatilities of the ASEAN-4 countries. Moreover, the objective of the study is to determine the effects of ASEAN-4 stock market volatility with regards to the Japanese Yen as a safe haven currency and the extent of its risk exposure as a safe haven currency during stock market volatility in the ASEAN-4 countries using the study’s main model. The results of this study indicate that the Japanese Yen is sometimes affected by the stock market’s volatility which is why it only serves as a safe haven currency during certain periods and only in some countries. Moreover, results also show that the Japanese Yen best be used as a safe haven currency for the country of Indonesia while for the countries of the Philippines and Thailand, the Japanese Yen is somewhat useful in certain periods. However, for the country of Malaysia, the Japanese Yen did poorly, thus it was deemed not suitable for Bursa Malaysia.
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Authors Lao, Shiela Camille Chua
Journal Malay Journal
Year 2020
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