Yen stronger in NY as trade war fears hurts risk appetite

The yen rose on Thursday, reaching a three-week peak against the dollar, as traders sought safety in the Japanese currency amid global trade tensions and weakness on Wall Street. US President Donald Trump signed a presidential memorandum on Thursday that could impose tariffs on up to $60 billion of imports from China, although his action was far removed from threats that could have ignited a global trade war. The yen, which investors tend to buy in times of risk aversion, jumped against the dollar while major US stock indexes skidded.
"It looks like another broadly risk-off session across global financial markets," said Omer Esiner, chief market strategist with Commonwealth Foreign Exchange in Washington. "The catalyst seems to be, once again, increasing concerns about a looming trade war." China is preparing a range of responses to the planned US tariffs and will stand up to protectionism, but still hopes for dialogue, Beijing's ambassador to the World Trade Organization said. The dollar fell 0.55against the yen, at 105.46105.54 yen, after earlier slipping as low as 105.23 yen, its lowest level since March 2.
The euro also weakened against the Japanese currency, trading 129.87 The dollar index, which measures the greenback against a basket of six major currencies, was up 0.030.07 percent at 89.81189.847. It rebounded from a one-month trough reached earlier in the day as traders in Europe and Asia digested the outlook from the US Federal Reserve on Wednesday following its first policy meeting under Chairman Jerome Powell.
"As the dust has settled, the market gave what Powell said during his press conference a dovish spin," said Jack McIntyre, portfolio manager at Brandywine Global in Philadelphia. The Fed raised US interest rates by 25 basis points to 1.75 percent on Wednesday and signaled two more rate hikes for 2018. Dollar bulls had been expecting a total of four rate hikes in 2018. Sterling spiked above $1.42 before falling back as investors focused on the likelihood that rates will rise only very slowly. The pound was down 0.23 percentdown 0.23 percent to $1.4108$1.4109, below where it traded before the Bank of England's Monetary Policy Committee voted 7-2 to keep its main rate at 0.5 percent.