Sterling advances in Asia

The pound advanced to a six-month high against the dollar on Thursday after the latest polls favoured Britain remaining in the European Union, just hours before referendum voting was due to open. Polls by ComRes, conducted for the Daily Mail newspaper and ITV television, and by YouGov for The Times newspaper in London, showed a last-minute rise in support for Britain to remain in the EU.
Reduced Brexit fears have helped sterling gain roughly three percent so far this week, although several poll results have been too close to call a definitive outcome. The pound was up 0.6 percent at $1.4793 after touching $1.4847, its highest since the beginning of the year.
A wait-and-see mood was expected to prevail through the rest of the day, dotted by possible bouts of volatility, as markets nervously awaited the British poll results. "It will be hard for the market move until the poll results are released. The pound obviously will take centre stage. But other European currencies and particularly dollar/yen also bear watching as the pair will reflect swings in risk sentiment," said Shin Kadota, chief Japan FX strategist at Barclays in Tokyo. The polling will take place between 0600-2100 GMT on Thursday, with the results expected early on Friday. Poll results may not be published during voting hours but financial market prices could be affected by independent surveys conducted by some private institutions, analysts said.
The dollar was up 0.2 percent at 104.645 yen after moving the previous day in a narrow 104.855-104.310 range. The greenback has sagged against the yen after Tuesday's testimony by Federal Reserve Janet Yellen was seen to have played down the chances of a US interest rate increase in July. The euro extended overnight gains, rising 0.4 percent to $1.1338. A slight ebb in prospects of Britain leaving the EU has helped the common currency. Sterling climbed to a two-week high of 154.75 yen.
J.P. Morgan expects sterling would surge towards $1.51 and the dollar rally to around 108 yen if Britons opt to stick with the EU. But it saw the pound tank towards $1.32 and dollar/yen retreat to around 101 in the event of a Brexit vote. The safe-haven yen is thought likely to appreciate sharply on a Brexit, which would raise the prospect of actual market intervention by Japanese authorities.
"If dollar/yen falls below 100 and the yen rises broadly against emerging currencies and the pound, Japanese authorities could switch from verbal to actual intervention," said Masafumi Yamamoto, chief forex strategist at Mizuho Securities in Tokyo. "They could intervene as it would not be about raising Japan's competitiveness, but rather reacting against abnormal market moves that threaten the economy," he said. The Australian dollar, seen as a rough proxy of risk sentiment, was up 0.3 percent at $0.7519, not far from a seven-week high of $0.7527 scaled overnight.