TOKYO :The safe-haven Japanese yen rallied on Monday while gold pushed to a fresh peak as uncertainty around tariffs clouded the outlook for U.S. inflation and economic growth and kept traders away from risky assets, as well as the dollar.
Markets are nervous ahead of a new round of reciprocal levies that the White House is due to announce on Wednesday. Details are scarce, but U.S. President Donald Trump said late on Sunday that essentially all countries will be slapped with duties this week.
The yen strengthened to 148.7 per U.S. dollar at one point on Monday, and was last 0.43 per cent stronger at 149.135. The Japanese currency rallied 0.82 per cent on Friday, when U.S. data showed core inflation rose more than expected last month, fuelling fears of stagflation.
“I think only one thing can be said with certainty is that the uncertainty will not end with the announcement of the reciprocal tariffs by Trump on the 2nd of April,” said Jane Foley, head of FX strategy, at Rabobank.
Gold pushed to an unprecedented $3,128.06, marking three consecutive sessions registering record highs.
The euro eased 0.13 per cent to $1.08205, though it is set for a nearly 4.5 per cent rise this quarter, its biggest jump since the third quarter of 2022, thanks to Germany’s fiscal overhaul.
The likely implementation of tariffs imposed by the United States means Europe will have to take better control of its future, European Central Bank (ECB) head Christine Lagarde said on Monday, reiterating the impact of tariffs and tit-for-tat measures on the bloc’s growth.
On Friday, Trump had said he was open to carving out deals with countries seeking to avoid tariffs, but the Washington Post reported at the weekend he was urging his advisers to take a more aggressive stance.
“Across-the-board tariffs would be a negative surprise, in our view,” Merrill Lynch analysts Michalis Rousakis and Claudio Piron wrote in a research note.
The U.S. dollar index, which measures the currency against six major peers, trod water at 104.03.
“This week is quite a big data week for the U.S., particularly with payrolls data at the end of the week and it seems that the market is a little bit reluctant to buy the dollar,” Foley said.
U.S. non-farm payrolls data is due on Friday.
Elsewhere, the pound rose 0.15 per cent to $1.2949 and is set for a nearly 3 per cent monthly climb – its best since November 2023.
A British government spokesperson said Prime Minister Keir Starmer and Trump had “productive negotiations” towards a trade deal in a phone call on Sunday.
The Canadian dollar eased at C$1.4347 per greenback. Mexico’s peso slipped to 20.3932 per dollar.
The Aussie eased 0.56 per cent to $0.6256 on Monday, ahead of the Reserve Bank of Australia’s (RBA) policy meeting on Tuesday.
