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Japanese Yen Profits from Risk Aversion Caused by Trade Wars

May 13, 2019 at 17:57 by Vladimir Vyun

Various Japanese yen notesThe Japanese yen surged against the majority of most-traded currencies today as the negative market sentiment drove investors towards safer assets. The yen posted losses versus the Swiss franc, which also profited from its role of a safe haven, though by now the Japanese currency has trimmed its losses.

As for news from Japan itself, the Cabinet Office reported that the leading index slipped to 96.3% in March from 97.1% in February. The reading was within expectations.

But as usual, domestic economic indicators had limited impact on the currency. Being considered a safe haven, the yen thrived due to the reports that China introduced 25% tariffs on $60 billion worth of US goods in response to the similar tariffs from the United States on $200 billion worth of Chinese goods. Some market analysts argue, though, that the yen itself can become vulnerable to the negative sentiment as Japan has substantial trade with China.

USD/JPY dropped from 109.76 to 109.29 as of 17:42 GMT today. EUR/JPY declined from 123.29 to 122.75. CHF/JPY was up from 108.40 to 108.87 intraday but has pulled back to 108.65 by now.

If you have any questions, comments, or opinions regarding the Japanese Yen, feel free to post them using the commentary form below.

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