In Tokyo, the Japanese yen, known as a safe-haven currency, strengthened on Monday along with the surge in gold prices to new all-time highs. Traders expressed concerns about potential inflation and hindered economic growth due to the tariffs imposed by U.S. President Donald Trump.
Ahead of the announcement of new reciprocal tariffs by the White House, markets were on edge. Although details remained limited, Trump indicated on Sunday that most countries would face tariffs during the week. Despite mentioning a willingness to negotiate exempting certain countries from tariffs on Friday, a report from the Washington Post over the weekend suggested that Trump was leaning towards a more aggressive stance, increasing market anxiety.
The yen saw a rise of up to 0.35% against the U.S. dollar to 149.30 at one point on Monday, settling at 149.52, following a 0.82% increase on Friday when core inflation in the U.S. rose above expectations, sparking concerns about stagflation. The U.S. dollar faced additional pressure due to investors shifting to the safety of U.S. Treasuries, causing the yield on the 10-year note to drop by about 6 basis points to 4.1960% on Monday.
Gold briefly surged to a record high of $3,097.36 before stabilizing at $3,086.61, marking three consecutive sessions with all-time highs.
The recent set of economic data from the U.S. raised worries of stagflation and led to a decline in stocks and currencies such as the Australian and New Zealand dollars as investors sought refuge in safer assets, according to Ray Attrill, head of FX research at National Australia Bank.
On Monday, the Australian dollar slipped by 0.15% to $0.6281, while the New Zealand dollar dropped 0.35% to $0.5698. The Swiss franc, also considered a safe-haven currency, initially rose by 0.3% against the U.S. dollar to 0.8775, ultimately stabilizing at 0.8807. The euro remained steady at $1.0830, while the British pound increased by 0.17% to $1.2952.
A British government spokesperson reported productive trade deal discussions between Prime Minister Keir Starmer and Trump during a phone call on Sunday.
The cryptocurrency bitcoin experienced a slight decline to around $82,072.