Yen advances as trade woes, Brexit concerns shake investor confidence

Yen advances as trade woes, Brexit concerns shake investor confidence

TOKYO,. The yen advanced against its peers today as persistent US-China trade fears and Brexit concerns fanned risk aversion, lifting the safe-haven Japanese currency.

The yen was 0.1 per cent firmer at 110.240 to the dollar, having pulled back from a two-week low of 110.675 plumbed on Tuesday.

The Japanese currency also rose modestly against the euro, pound and Australian dollar, adding to overnight gains.

Reports that the United States could impose restrictions on Chinese technology company Hikvision renewed market jitters about trade on Wednesday, reversing a relief rally that followed Washington’s move to temporary ease curbs against Huawei Technology Co Ltd.

A deepening Brexit crisis also sapped investor risk sentiment. Pressure on British Prime Minister Theresa May to resign increased after her new Brexit gambit backfired and as a key ally resigned from her Cabinet.

“While the currency market appears to have mostly priced in May’s eventual resignation, it is now trying to work out who might replace her,” said Yukio Ishizaki, senior currency strategist at Daiwa Securities.

“The possibility of someone like Boris Johnson replacing May will heighten prospects of a no-deal Brexit and likely lead to further ‘risk off.’ The mood in the market is darkening as the Brexit ongoings add to prevailing US-China worries.”

The pound was little changed at US$1.2663 (RM5.3093) after slipping to US$1.2625 overnight, its lowest since January 4.

The dollar index against a basket of six major currencies was steady at 98.064, its rise earlier in the week to a one-month high of 98.134 stalling as US yields declined amid the risk aversion.

The euro was flat at US$1.1154, in close range of a 2-1/2-week low of US$1.1142 brushed on Tuesday ahead of the May 23-26 European parliamentary election.

The Swiss franc, a safe-haven along with the yen, was a shade higher at 1.009 francs per dollar after advancing 0.15 per cent yesterday.

The Australian dollar nudged down 0.1 per cent to US$0.6876. ? Reuters