TOKYO: The safe-haven Japanese yen rose on Monday while gold pushed to a fresh all-time peak as traders worried that U.S. President Donald Trump’s tariffs will ignite inflation and crimp economic growth.
Markets are nervous ahead of a new round of reciprocal levies that the White House is due to announce on Wednesday. Details are scarce, but Trump said late on Sunday that essentially all countries will be slapped with duties this week.
On Friday, Trump had said he was open to carving out deals with countries seeking to avoid tariffs, but the Washington Post reported at the weekend that he was urging his advisers to take a more aggressive stance.
The yen was up as much as 0.35% at 149.30 per U.S. dollar at one point on Monday, and was last 0.2% stronger at 149.52.
The Japanese currency rallied 0.82% on Friday, when U.S. data showed core inflation rose more than expected last month, fuelling fears of stagflation.
The dollar was under additional pressure from a flight to the safety of U.S. Treasuries, which sent the yield on the 10-year note sliding about 6 basis points to 4.1960% on Monday.
Gold briefly pushed to an unprecedented $3,097.36 before trading little changed at $3,086.61, making it three consecutive sessions registering record highs.
“The latest batch of U.S. economic data … contained a distinct stagflationary whiff,” spurring a decline in stocks and currencies like the Australian and New Zealand dollars as traders ran from riskier assets, said Ray Attrill, head of FX research at National Australia Bank.
The Aussie eased 0.15% to $0.6281 on Monday, and the New Zealand dollar declined 0.35% to $0.5698.
The Swiss franc , another traditional safe haven, started the day by rising 0.3% to 0.8775 per dollar, but was last flat at 0.8807.
Yen has weakened due to tariff-related concerns
The euro was steady at $1.0830, while sterling added 0.17% to $1.2952.
A British government spokesperson said Prime Minister Keir Starmer and Trump had “productive negotiations” towards a trade deal in a phone call on Sunday.
Cryptocurrency bitcoin eased slightly to around $82,072.
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