By Stanley White
TOKYO (Reuters) – China's yen reached an 11-year low in onshore trading, falling to a record low in offshore trading, following a renewed escalation in the US-China trade wars had affected and darkened the global economic outlook.
The yen, which was often bought as a safe haven, briefly rose to the highest value against the dollar since a lightning crash in January. However, these gains were dashed as Japanese importers sold the yen, which remained firm against other currencies, signaling a decline in risk appetite.
Gold reached its highest level since April 201
Turkish lira and emerging Asian currencies also fell as investors fled to safer assets.
"China's economy is slowing down so the yuan will only continue to fall as authorities take steps to stop it," said Takuya Kanda, general manager of research at Gaitame.com Research Institute in Tokyo.
"A few dollar purchases from Japanese importers have pulled dollar / yen off their lows, but without such real demand there is no reason to buy the dollar, the yen will continue to rise."
Ashore in China In the offshore market, the yuan slid to 7.1850 yuan, the weakest since the beginning of international trade in the currency in 2010.
The Turkish lira weakened by more than 1% 5.8 against the dollar on Monday, after briefly falling to 6.47, which market observers called a "flash crash", as Japanese investors reduced risk assets.
Equities fell on Friday, as President Donald Trump announced an additional 5% duty on US $ 550bn for Chinese goods, hours after Beijing revealed $ 75bn of retaliatory tariffs on US products.
At the G7 meeting in France on the weekend, Trump caused some confusion when he indicated that he might have been thinking about tariffs.
The White House clarified these comments on Sunday, saying Trump wished he had raised tariffs on Chinese goods even higher in the past week, even though he signaled that he had planned nothing
10-year US Treasury benchmark return () to 1.4560%, its lowest level in more than three years. The yield curve reversed as 2-year debt () yields fell to 1.4568%.
Earlier this month, the yield curve reversed for the first time in more than a decade, with long-term yields trading below short-term yields. commonly seen as the signal of an economic recession. Investors will observe if this section of the curve reverses again.
The yen rose to $ 104.46 per dollar at the start of Asian trading, its highest level since January, before trading at $ 105.35 that day.
Speculators hit the market very early to put pressure on the dollar / yen, "said Yukio Ishizuki, foreign exchange strategist at Daiwa Securities in Tokyo.
" The fact that the price is so low shows that the speculators have become a bit wilder. The trade war is fueling all these movements, and I see no near-term end. "
The yen will next aim for $ 104.10 per dollar, which is the high it reached during a flash crash on January 3, which plagued the financial markets," said Daiwa Securities Ishizuki.
The Australian Dollar, a liquid proxy for the risk, fell 0.3% to $ 0.6735 at 0449 GMT, with an earlier level of $ 0.6690 nearing the previous decade's low of $ 0.66775.
The New Zealand Dollar slipped to $ 0.6342, a level that has not risen since September 2015.
Compared to the yen, the price fell briefly to $ 69.97 (), its lowest level since April 2009, before paring Loss.
Slipped to 66.32 yen (), its lowest level since November 2012.