Yen extends gains to five-month high on haven demand
The Japanese yen rose in Asian trade on Tuesday against major rivals, extending the gains for the second straight session against the dollar and hitting a five-month high on mounting risk aversion and haven demand with massive US stock selloffs.
The gains are also underpinned by a drop in US 10-year treasury yields, which boosted the odds of a Fed rate cut in the first half of the year.
The Price
The USD/JPY fell 0.5% today to 146.54 yen per dollar, the lowest since October 2024, with a session-high at 147.27.
The yen rose 0.5% on Monday, the third profit in four days, as US yields and stocks dropped.
US Stocks
US stock indices marked their worst daily loss since September 2022 on Monday, plumbing six-month lows as investors flee the market on concerns about Trump’s tariffs and US recession.
The S&P 500 is now down 8.6% from its February 19 record high, losing $4 trillion of market value since then.
A series of controversial Trump policies spiked uncertainties for companies and consumers, with the worsening trade war damaging sentiment.
Japan’s Nikkei followed suit and lost over a thousand points, hitting six-month lows, as the US is Japan’s second largest trade partner.
US Yields
US 10-year treasury yields fell 0.8% on Tuesday, pressuring the greenback against major rivals.
Concerns are increasing about US growth, especially after weak US jobs data in February.
The odds of a Federal Reserve 0.25% interest rate cut in March are still standing at 5%.
Ethereum slumps over 9% amid a heavy crypto selloff
Most cryptocurrencies fell on Monday as the crypto market faces a huge selloff, impacted by a plunging sentiment across sectors due to US President Donald Trump’s trade policies.
It comes after statements by President Trump to the press on Sunday, refusing to rule out a potential recession in 2025 due to his trade policies.
Trump said the US economy is going through a large transition, and described his protectionist policies as “very huge”.
The fear index on Wall Street surged by 14.45% to 26.75 points after touching December 18 highs recently amid a heavy market selloff.
Now investors await important US consumer prices and producer prices data this week.
Ethereum
On trading, ethereum tumbled 9.8% as of 20:47 GMT on Coinmarketcap to $1845.4.
Gold declines as dollar edges higher
Gold prices fell on Monday amid large-scale market turmoil due to concerns about a US recession.
It comes after statements by President Trump to the press on Sunday, refusing to rule out a potential recession in 2025 due to his trade policies.
Trump said the US economy is going through a large transition, and described his protectionist policies as “very huge”.
The fear index on Wall Street surged by 14.45% to 26.75 points after touching December 18 highs recently amid a heavy market selloff.
Now investors await important US consumer prices and producer prices data this week.
Otherwise, the dollar index rose 0.1% as of 20:19 GMT to 103.9, with a session-high at 104.06, and a low at 103.5.
On trading, gold spot prices fell 0.8% as of 20:20 GMT to $2891.6 an ounce.
Brent extends recovery from four-year lows
International benchmark Brent rose in European trade on Monday away from four-year lows on active short-covering despite uncertainty about tariffs.
Prices are boosted by the prospects of additional US tariffs imposed by President Donald Trump on Russia if efforts to reach a peace deal with Ukraine failed.
Prices
Brent rose 0.75% to $70.83 a barrel, with a session-low at $69.87.
Brent rose 1.5% on Friday away from recent four-year lows at $68.37.
International oil prices lost 4% last week, the seventh weekly loss in a row due to the tariff crisis and its impact on global demand.
Tariffs
US President Donald Trump’s protectionist policies caused chaos in global markets as he imposed then suspended tariffs on Mexico and Canada multiple times, while imposing multiple new tariffs on China.
Russian Sanctions
Trump threatened new sanctions on Russia if it failed to reach a ceasefire deal with Ukraine.
Reuters sources also said that the US is considering to alleviate sanctions on the Russian energy sector if Russia agreed to end the war with Ukraine.
Iranian Exports
The Trump administration is also attempting to choke Iranian oil exports amid efforts to pressure the country and control its nuclear program, with the Iranian supreme leader Khamenei asserting that his country won’t bend to pressures.