Fundamental Comment

Yen slides to two-month high as investors shift attention away from trade war

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The Japanese yen traded lower versus major currencies on Tuesday amid strong rebound in equities as investors setting aside fears over a trade war for the moment and shifted their focus on corporate earnings.

The USDJPY pair hit a new two-month high at 111.20, extending its rise for a second straight session, where the EURJPY and GBPJPY also were higher at 130.42 and 147.52.

The allure of the yen as a safe haven have receded since the beginning of the week, as investors turned back to equities.

Overnight, the Dow Jones Industrial Average added 1.31% and S&P 500 index surged 0.88%, marking their biggest gains in more than a month.

In Asia, stocks resumed their advance for a third straight session, where the MSCI Asia Pacific Index jumped the most in a month.

The kick off of the earnings season this week could divert investors’ attention away from the trade war, especially amid no new updates from both U.S. and China after last week’s new tariffs.

However, the tensions may escalate again as U.S. President Donald Trump has vowed to impose more tariffs on Chinese products.

Gold, a famous refuge, also slipped to $1255.98 an ounce after climbing to a two-week peak of $1265.91 on Monday, as the dollar gained some ground.

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