New York, US (BBN) – The yen gained slightly in early Asia on Wednesday as data on machinery orders provided a lift in sentiment and demand was supported by safe-haven buying linked to increased tensions on the Korean peninsula with Chinese President Xi Jinping holding a telephone call with US President Donald Trump over the issue.
In Japan, core machinery orders jumped 5.6 per cent year-on-year in February, beating a 2.5 per cent gain seen, though the month-on-month figure rose 1.5 per cent, missing the 3.7 per cent gain expected, reports
At the same time, PPI (producer prices) in Japan rose 1.4 per cent year-on-year in March, a tad faster than the 1.3 per cent rise seen.
USD/JPY changed hands at 109.51, down 0.10 per cent. AUD/USD traded at 0.7495, down 0.05 per cent.
China reported CPI for March fell 0.3 per cent as expected month-on-month and a rose 0.9 per cent year-on-year, a tick less than seen. PPI in China irose 7.6 per cent as expected.
The US dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, drose 0.02 per cent to 100.63.
Overnight, the dollar slumped against a basket of major currencies on Tuesday, as the ‘flight to safety’ sentiment began to set in for investors amid rising geopolitical tensions.
In the absence of top-tier market moving economic data on Tuesday, rising geopolitical events remained front and center, as investors poured into safe-haven assets, after expectations grew the US may take military action against North Korea.
The U.S decided to move a Navy strike group toward the Korean peninsula amid continued missile tests by North Korea.
Meanwhile, President Donald Trump tweeted on Tuesday, “North Korea is looking for trouble” and signalled that the U.S. is prepared to solve the problem on its own, should China decline to offer assistance.
Elsewhere, further signs of ‘a flight to safety’ surfaced Tuesday, after demand for US treasuries soared, which further suppressed yields – the US 10-Year fell to a session low of 2.293.
The slump in the dollar reflected some analysts’ commentary on the short-term trend for the greenback, after Morgan Stanley (NYSE:MS) noted in a research report to clients that “USD positioning is short but warned that “sentiment has improved in recent trading sessions.”