On Tuesday afternoon, USDJPY is trading downwards; investors like the Yen again.
The Japanese Yen is rising against the USD on Tuesday. The current quote for the instrument is 109.73.
The demand for the Japanese currency is growing as investors are trying to avoid risks of new trade wars. Their interest in “safe haven” assets, including the Yen, skyrocketed after the USA announced its decision to introduce new import duties on more than 1,000 goods from China starting July 6th. China, it its turn, said it was ready to do the same.
The story spirals on: at first, China and the USA were only speaking about possible tightening of their trade relations, but now they have already specified the exact dates and lists of goods. Apart from this, China is no longer waiting for the USA to make its first move, but is acting preventively. This morning, China reported that it was ready for countermeasures and might start acting as soon as the USA provided the list of additional import fees.
Investors are more or less objective in their estimations of the current situation: they understand that companies and manufacturers will suffer and try to adapt to new conditions while the politicians are fighting for the global market.
It seems that the trade wars topic may be one of the most significant drivers for a while. In this light, one may expect the Yen to continue strengthening, because investors will do their best to hedge risks.