TOKYO- The safe-haven Japanese yen strengthened on Monday while gold pushed to a fresh peak as traders worried that US President Donald Trump’s tariffs would 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.
The yen was up as much as 0.74 percent at 148.735 per US dollar at one point on Monday, and was last 0.46 percent stronger at 149.145. The Japanese currency rallied 0.82 percent on Friday, when US data showed core inflation rose more than expected last month, fueling fears of stagflation.
The dollar was under additional pressure from a flight to the safety of US Treasuries, which sent the yield on the 10-year note sliding as much as 6-1/2 basis points to 4.19 percent on Monday.
Gold pushed to an unprecedented $3,112.14, making it three consecutive sessions registering record highs.
The Swiss franc another traditional safe haven, started the day by rising 0.3 percent to 0.8775 per dollar.
“The latest batch of US 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.
In terms of Wednesday’s tariff announcement, “obviously we’ll get a little bit of clarity, but I don’t think it’s going to eliminate the uncertainty which is clearly wracking markets, as well as businesses and consumers.”
