The Japanese yen and gold have experienced significant gains amidst rising concerns that the proposed tariffs by U.S. President Donald Trump could incite inflation and hamper economic growth, thus prompting a surge in safe-haven investments. The market is on edge as it braces for the announcement of a new series of reciprocal levies set for Wednesday by the White House.
On Monday, the yen saw a jump of as much as 0.74% at 148.735 per U.S. dollar USDJPY, and later held strong at 0.46% at 149.145. The Japanese currency had already rallied 0.82% on Friday, following U.S. reports indicating a higher-than-anticipated rise in core inflation last month — a development that fuels stagflation concerns.
Meanwhile, the dollar faced extra pressure due to a shift towards the perceived safety of U.S. Treasuries, which led to a decrease of as much as 6-1/2 basis points in the yield of the 10-year note US10Y to 4.19% on Monday. Gold GOLD surged to an all-time high of $3,112.14, marking three straight sessions of record-breaking highs.
The Swiss franc USDCHF, another classic safe-haven, began the day with a 0.3% increase to 0.8775 per dollar. Ray Attrill, head of FX research at National Australia Bank, pointed out that the recent U.S. economic data revealed a “distinct stagflationary whiff,” resulting in a downturn in stocks and riskier currencies such as the Australian and New Zealand dollars.
Bitcoin, a leading cryptocurrency, saw a 1% dip, trading at $81,703. The wider impact on the crypto market remains to be seen.
