Forex News: Yen Rises Amid Risk Aversion

Yen Rises Amid Risk Aversion

(RTTNews) - The Japanese yen strengthened against other major currencies in the European session on Monday, as the investor sentiment fell on lingering tariff worries, the threat of a U.S. recession and signs of deepening deflationary pressures in China.

China's consumer price index dropped in February at the fastest rate in 13 months, according to data released on Sunday, while producer price deflation continued for the 30th consecutive month.

At the beginning of the week-long National People's Congress conference, which ends Tuesday, Beijing promised additional stimulus to increase consumption and promote artificial intelligence innovation.

Concerns about U.S. tariffs and its impact on the economy, also led to the downturn of investor sentiment.

U.S. President Donald Trump in a Fox News interview on Sunday declined to rule out the possibility of a recession following his tariff actions on Mexico, Canada and China.

"There is a period of transition, because what we're doing is very big. We're bringing wealth back to America," Trump told the "Sunday Morning Futures" program.

Last Friday, the Labor Department released a report showing employment in the U.S. increased by slightly less than expected in the month of February.

Data showed non-farm payroll employment climbed by 151,000 jobs in February after rising by a downwardly revised 125,000 jobs in January. The unemployment rate edged up to 4.1 percent.

In the European trading today, the yen rose to a 5-day high of 159.04 against the euro and a 6-day high of 189.47 against the pound, from early lows of 160.35 and 190.95, respectively. If the yen extends its uptrend, it is likely to find resistance around 155.00 against the euro and 187.00 against the pound.

Against the U.S. dollar and the Swiss franc, the yen edged up to 146.97 and 167.48 from early lows of 147.79 and 168.31, respectively. On the upside, 145.00 against the greenback and 166.00 against the franc are seen as the next resistance levels for the yen. Looking ahead, U.S. consumer inflation expectations for February is set to be published in the New York session.

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