The Japanese yen and other safe haven currency assets were firmer during the Asian trade session on Thursday.
Forex traders are worrying that a trade deal between China and the United States will be held up as disagreements on core issues remain unresolved.
Adding to the decrease in trade sentiment, today, retail sales, industrial output and investment data out of China were all weaker than expected which boosted safe haven Forex units like the yen and Swiss franc.
The benchmark USD/JPY currency exchange rate was trading at 108.77 yen as the dollar softened. This Forex market was at a high of ¥108.66 during the American trade session.
The Japanese currency is viewed as a safe haven asset because of Japan’s role as the world’s largest net creditor country. The Japanese currency against the dollar was at a five month low last week.
The EUR/JPY Forex market was also trading lower as the euro fetched 119.60 against the Japanese currency. This market was trading near a one month high on Wednesday.
The dollar index, which measures the greenback against six other currencies, was trading near a one month high. The index was last trading at 98.38.
Yen Gets a Boost Thanks to Trade Talks that appear to be Stalling
Traders are monitoring trade talks between China and the United States. These talks, have once again, stalled. China does not want a trade deal that is one sided and in favor of Washington DC.
This comes just a day after President Donald Trump’s speech in New York. President Trump said that the United States was “close” to signing a “Phase One” trade deal with China.
The U.S. President also said that he was ready to “substantially” increase tariffs on goods from China if they did not sign a deal.
This has weakened consumer sentiment as they look to safe haven asset classes to hedge their positions.