The Japanese yen gained against most of the other currencies today as coronavirus fears continued to drive investors to safer assets. The yen, being one of such assets, profited immensely from the demand for safety. Japan’s macroeconomic data released today was good but had a limited impact on the currency.
The deadly COVID-19 disease continued to spread around the globe, with the total number of cases exceeding 80,000. The death toll continued to rise in China, as well as South Korea, Italy, and Iran. The virus reached the United States, Australia, and Croatia. The news kept markets in a risk-off mode.
G20 released a communique over the weekend, providing a relatively optimistic outlook for the global economy:
After signs of stabilization at the end of 2019, global economic growth is expected to pick up modestly in 2020 and 2021. The recovery is supported by the continuation of accommodative financial conditions and some signs of easing trade tensions.
But the report also mentioned risks to global growth, including COVID-19:
However, global economic growth remains slow and downside risks to the outlook persist, including those arising from geopolitical and remaining trade tensions, and policy uncertainty. We will enhance global risk monitoring, including of the recent outbreak of COVID-19.
As for Japan’s economic data, the Bank of Japan reported that the Services Producer Price Index rose by 2.3% in January, year-on-year. Analysts were expecting the same 2.1% rate of growth as in each of the three previous months.
USD/JPY slipped from 110.70 to 110.63 as of 13:14 GMT today. EUR/JPY declined from 120.15 to 119.92. GBP/JPY was an exception, managing to gain from 143.07 to 143.40.
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