Japanese Yen Rallies Against US Dollar on Safe Haven Flows

The Japanese yen today rallied against the US dollar driven by the risk-off market sentiment, which saw the yen benefit from safe-haven flows. The USD/JPY currency pair fell to new multi-week lows as the yen kept making gains against the greenback despite the DXY’s gains.
The USD/JPY currency pair today fell from an opening high of 106.45 to a low of 105.98 in the American session but was slightly off these lows at the time of writing.
The yen’s rally defied the dollar’s gains as tracked by the US Dollar Index, which hit a high of 100.20 earlier today. Investor risk appetite was negatively affected by the ongoing spat between the US and China, which started as a disagreement about the origin of the coronavirus, but has since morphed into something bigger. President Donald Trump has threatened to cancel the phase one trade deal and to impose new tariffs on Chinese goods. The Trump administration has also threatened to stop repaying the debt owed to China, which has escalated tensions between the two countries. 
The dollar got some relief in the early American session following the release of the US ADP employment change report, which showed that the US economy shed over 20 million jobs in April. The pair headed lower shortly afterwards amid high demand for the yen. 
The currency pair’s future performance is likely to be affected by geopolitical events and investor sentiment.
The USD/JPY currency pair was trading at 106.08 as at 19:09 GMT, having fallen from a high of 106.45. The EUR/JPY currency pair was trading at 114.61, having dropped from a high of 115.37.

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