Dollar hits seven-month low below ¥106 in Tokyo morning trading over China-U.S. trade fears

  • 7 Aug, 2019

The dollar fell below ¥106 for the first time in about seven months in Tokyo trading Monday morning, amid growing concerns over U.S.-China trade friction.

The greenback sank as low as around ¥105.80 in late morning trades. At 11 a.m., the currency stood at ¥106.07, down from ¥106.91 at 5 p.m. Friday.

The moves put the dollar below ¥106 for the first time since Jan. 3.

Investors shied away from risk assets amid mounting uncertainty over the trade disputes between the world’s two largest economies.

The 225-issue Nikkei average shed 2.4 percent by the midday break, extending Friday’s 2.1 percent slide, to 20,590.87, its lowest level since June 4.

The grim mood followed declines Friday on Wall Street, where the blue chip Dow and the S&P 500 hit their lowest levels since late June.

U.S. President Donald Trump decided abruptly on Thursday to apply a 10 percent tariff $300 billion on Chinese imports, stunning markets and ending a month-long trade truce. China vowed to fight back on Friday.

The rapidly strengthened yen during Asian trading also soured sentiment and dragged down exporters, with Nissan dropping 4.8 percent, Panasonic down 3.5 percent and Daikin Industries slipping 3.9 percent.

Kobe Steel nosedived 12.8 percent to its seven-year low, after the country’s third-largest steel-maker cut its recurring profit forecast for the financial year ending March by 67 percent. The U.S.-China trade war has battered steel demand for automobiles and aluminium, as well as copper demand for chips.

Yahoo Japan slid 12.2 percent after the internet company’s operating profit fell 24 percent, below analyst estimates, disappointed investors.

The broader Topix lost 2.4 percent to 1,496.61, its lowest level in two months, by the midday break.