Dollar Stays Firm against Yen

On Tuesday, the dollar remained steady against the yen, supported by receding concerns about a trade war rising from the proposed tariffs of U.S. President Donald Trump on steel and aluminum.

Today the dollar went steady at 106.22 yen, while yesterday it gained 0.4 percent, edging away from the greenback’s 16-month low of 105.24 last Friday.

Last week, the dollar had dropped to 16-month lows against the safe-haven yen as the fears of a trade war gripped markets after President Trump announced his tariffs plan.

Meanwhile, jitters have eased this week as the pressure to retreat from the tariffs plan increased and market participants sees the proposed tariffs of President Trump as a negotiating tactic than a hard policy proposal.

“There is some relief and a shift to some risk-taking,” Teppei Ino, an analyst, stated.

According to Ino, the bounce of the dollar against the yen was still average to suggest that a downtrend seen over the past few months had ended.

The yen, on the other hand, showed a little reaction after Haruhiko Kuroda, Bank of Japan Governor, stated that there were downside risks to the projection of central bank that inflation would reach its target of 2 percent around the fiscal year, which will end in March 2020.

Last week, the yen went up after Kuroda highlighted on Friday that the prospect of an exit from accommodative policy of his inflation target was met.

Meanwhile, Heng Koon How, head of markets strategy for United Overseas Bank, stated that investors are now waiting for further news about Trump’s tariffs.

“There's a slight relief rally in the equities market and risk appetite. Going forward we have to assess the risk accordingly, depending on how the news flow is,” stated Heng.

The Canadian dollar last stood at C$1.2980 per U.S. dollar. The Canadian dollar had set a low of C$1.3002 on Monday, its lowest since July 2017.

The euro went up 0.1 percent to $1.2347. The euro is still recovering from a brief selloff on Monday, which is tied to the inconclusive weekend election of Italy.

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