Japanese Yen Gains on US-China Trade Conflict, Domestic Data

The Japanese yen gained today as risk aversion returned to markets after new developments in the US-China trade conflict. Domestic macroeconomic data was also supportive of the currency.
Japan’s Cabinet Office reported that gross domestic product rose 0.4% in the second quarter of this year from the previous three months. While it was a slower rate of growth than in the previous quarter, it exceeded the median forecast of an increase by just 0.1%. Year-on-year, GDP growth slowed to 1.8% in the second quarter from 2.8% in the first quarter of 2019.
Meanwhile, tensions between the United States and China continued to escalate. In response to the announcement of new tariffs on Chinese goods, China halted purchases of US agricultural products. The USA responded to that by postponing a decision on lifting restrictions from Chinese tech giant Huawei.
USD/JPY dropped from 106.07 to 105.66 as of 11:33 GMT today. EUR/JPY slipped from 118.59 to 118.40. GBP/JPY tumbled from 128.65 to 127.49, trading near the lowest level since November 2016.

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