Yesterday evening, USDJPY dropped to its weekly lows due to increased demand for “safe haven” assets.
Market players once again remembered that the Yen might serve as a “safe haven” asset with the Chinese coronavirus issue revived. The current quote for USDJPY is 110.83.
Yesterday afternoon, investors were pretty calm. However, in the evening they started worrying again after new information on Covid-2019 appeared in the media. The disease is reported to spread quickly in Italy and South Korea.
Market players are also very alarmed by quarantine restrictions introduced in many places: from closing international airports and canceling flights to isolating infected people. It is assumed that the global economy may suffer a lot of damage and cut down may key macroeconomic parameters. In this light, investors’ demand for “safe haven” assets, such as the Yen, is traditionally increasing.
As of now, about 80 people have been reported infected in 28 countries.
Strengthening of the Yen is not a good piece of news for Japan at the time when the country’s economy requires additional stimulus.