Fx-Yen rises as traders flock to harmless-haven assets – Reuters


(Reuters) – The Japanese yen rose and ten-12 months Treasury yields fell on Tuesday as traders fled to safer assets amid worries the U.S.-China trade conflict would get even worse, times just after both sides declared new tariffs.

Light is forged on a Japanese ten,000 yen note as it really is reflected in a plastic board in Tokyo, in this February 28, 2013 photo illustration. REUTERS/Shohei Miyano/Illustration/File Photograph

On Friday, China reported it would increase tariffs on $75 billion worthy of of American items. The United States retaliated by indicating it would elevate present tariffs on $250 billion worthy of of Chinese items to thirty% from 25% on Oct. one.

U.S. President Donald Trump also reported he would tax an additional $three hundred billion worthy of of Chinese imports fifteen%, relatively than the ten% he experienced planned. People levies go into effect on Sept. one.

On Monday, speaking on the sidelines of the G7 summit of entire world leaders in France, Trump reported Chinese officials experienced contacted U.S. trade counterparts overnight and offered to return to the negotiating desk.

Trump’s comments sparked a wave of so-identified as hazard-on trades, which at first boosted the dollar, weakened harmless-haven currencies, and lifted stock marketplaces.

Nevertheless, uncertainties crept in just after a Chinese Overseas Ministry spokesman reported he was unaware that a cell phone connect with experienced taken area. The Commerce Ministry, which normally releases statements on trade calls, did not react to a request for remark.

“The yen has been 1 of the most effective-performing world currencies this 12 months and continues to gain from setting up downside challenges to world expansion from escalating trade tensions,” reported Lee Hardman, currency analyst at MUFG.

The Japanese currency was final up by .5% at one hundred and five.sixty three towards the dollar JPY=EBS. That wasn’t as solid as Monday’s attain, when it attained a three-12 months large, excluding the January flash crash. The yen has gained three.six% towards the bucks as the trade war drove traders to harmless-haven assets.

The yen is “likely to bolster further more if tensions continue to make,” Hardman reported.

Ten-12 months U.S. Treasury yields US10YT=RR fell to one.5097%, keeping the generate curve inverted as two-12 months yields traded at one.5264% US2YT=RR, a signal of an impending economic downturn.

The offshore Chinese yuan, sensitive to U.S.-China trade disputes, was reduce Tuesday just after plunging to a file lower of 7.1870 towards the dollar the day in advance of. It final traded down .one% at 7.1770 CNH=EBS.

China’s central lender reduced its official yuan midpoint to an 11-one/2-12 months lower on Tuesday, but more powerful than traders experienced expected.

The Turkish lira was down by .four% at 5.8452 towards the dollar TRYTOM=D4, possessing plunged Monday by far more than ten% in a second flash crash this 12 months.

Elsewhere, major currencies ended up relatively steady.

The euro was up by .one% at $one.1113 EUR=EBS and the index that tracks the dollar towards 6 other currencies .DXY was l down .2% at ninety seven.898.

The pound was up .2% at $one.2242 GBP=D3 and .one% towards the euro at ninety.765 pence EURGBP=D3.

Reporting by Olga Cotaga, enhancing by Larry King

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