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GLOBAL MARKETS-Yen jumps as BoJ holds off easing; oil prices drop

Published 17/06/2016, 01:45 am
© Reuters.  GLOBAL MARKETS-Yen jumps as BoJ holds off easing; oil prices drop
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* Oil prices head for sixth straight session of losses

* Banks lead European stocks lower as Brexit worries dominate

* S&P, Dow poised for worst losing streak since August

* Yen spikes after BOJ holds policy

* U.S. benchmark yields hit 4-year low (Updates with early U.S. market activity, changes dateline, previous LONDON)

By Caroline Valetkevitch

NEW YORK, June 16 (Reuters) - The yen jumped to its highest level in more than three years against the euro on Thursday after the Bank of Japan refrained from further stimulus, while oil prices and bond yields tumbled ahead of next week's British vote on EU membership.

The drop in oil dragged down energy shares, and U.S. stocks were poised for their worst losing streak since August. U.S. Treasury yields fell to their lowest level in four years.

A vote by Britain to leave the European Union could undermine decades of European integration as well as create further global economic uncertainty.

"We get these reminders that while things are growing at a slow rate there are potential pitfalls ... reinforcing Fed commentary that the recovery is still somewhat tenuous," said Jeff Morris, Head of U.S. Equities at Standard Life (LON:SL) Investments in Boston.

The U.S. central bank's outlook along with concerns over Brexit, as it is called, helped to drive investors toward less risky assets.

The Federal Reserve on Wednesday lowered its economic growth forecast for this year and the next, while worries that Britain, the world's fifth-largest economy, will vote to quit the EU on June 23 continued to rattle markets.

Sterling GBPEUR= hit a two-month low against the euro, while the euro dropped 2.9 percent against the yen to 115.88 EURJPY= , after earlier hitting a 3-1/2-year trough at 115.84 yen. banks have been throwing a kitchen sink at the economy over the past seven years and now have no way to combat the weakness," said Matthew Tuttle, chief investment officer of Tuttle Tactical Management in Connecticut.

In equity markets, the Dow Jones industrial average .DJI was down 102.62 points, or 0.58 percent, to 17,537.55, the S&P 500 .SPX lost 14.89 points, or 0.72 percent, to 2,056.61 and the Nasdaq Composite .IXIC dropped 45.81 points, or 0.95 percent, to 4,789.13. European FTSEurofirst 300 index .FTEU3 fell 0.4 percent, with shares of UBS UBSG.S and Credit Suisse CSGN.S down after the Swiss National bank said both banks were likely to need to raise an extra 10 billion Swiss francs to meet new leverage requirements. rallied to a two-year peak, and spot gold XAU= was up 1.4 percent at $1,308.91 an ounce.

Benchmark 10-year Treasury US10YT=RR notes rose 18/32 in price to yield 1.532 percent. showing U.S. crude stockpiles fell less than expected, along with concerns over Britain's future, weighed on oil prices. crude futures LCOc1 were down $1.63 at $47.34, while U.S. crude futures CLc1 were down $1.75 at $46.26.

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