Japanese Yen Ends Week Strongest amid Risk Aversion

The Japanese yen ended the week as the strongest among the major currencies, supported by risk aversion. Market participants were seeking a safe haven amid geopolitical tensions and economic worries, and that led them to the safety of Japan’s currency.

The market sentiment was very optimistic at the start of the week as it looked like prospects for a trade war between the United States and China were waning. Yet the optimism quickly evaporated after US President Donald Trump contradicted his own top economic officials, saying that there is no deal between the USA and China. The traders’ mood soured further after Trump announced plans for tariffs on car imports and canceled a meeting with North Korean leader Kim Jong-un.

Poor macroeconomic reports in the eurozone and Great Britain diminished prospects for monetary tightening from their respective central banks.

Among currencies of emerging markets, the Turkish lira was in the spotlight as it was collapsing despite the efforts of Turkey’s central bank.

USD/JPY declined from 110.87 to 109.39. EUR/JPY slumped from 130.48 to 127.39. GBP/JPY slid from 149.24 to 145.41.

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