The Japanese yen is rising again after the short downfall. The currency declined due to bad data about the Japanese economy, as well as its susceptibility to the Chinese epidemy. However, it seems the investors overcame their fears that the infection will spread to Japan too, and decided to use the yen as safe-haven once again.
The yen increased against the U.S. dollar on Monday as the new coronavirus cases spurred a risk-off wave. The currency gained 0.73% at 110.74 per dollar, after strengthening to 110.34 earlier in the day.
The dollar so far was on the top of the safe-haven currencies, but today it experienced a drawback. The dollar index fell by 0.095% at 99.33 per dollar, most likely, because of the sharp lowering of U.S. equities.
U.S. futures collapsed in the last days. The Dow Jones Industrial Average, the Nasdaq and the S&P 500 fell almost by 3%. The European equities markets have also suffered, dropping to their lowest record since mid-2016.
Italy and several Middle Eastern countries are trying to deal with the virus outbreaks. There are fears of a global pandemic amount, even though China hasn’t reported new cases in Beijing and other cities.
Marvin Loh, the senior global markets strategist at State Street Global Markets, stated that the recent moves on the forex market are all a risk-off trade. Besides the dollar and yen, the Swiss franc is also in demand.
Action Economics analysts also noted that in the scheme of things and heightened coronavirus concerns, USD-JPY is holding up relatively well. While there is still a chance that investors will discount the yen as a traditional safe-haven currency due to the possible virus exposure, so far, it’s not the case.
Meanwhile, the Australian and New Zealand dollars strengthened moderately by 0.2% against the greenback. The Chinese yuan also rose 0.2%, while the Korean won mostly recouped heavy losses made on Tuesday.
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