Yen surges as investors retreat to safe haven assets

The Japanese Yen on Friday rose to a one-month high after the reports of the virus spreading outside of China piled on concerns and sent investors retreating to safe-haven assets.

Hopes of the virus containment in China diminished after several cases were reported on different continents, prompting governments to take action.  

The Yen jumped by half a percent to 109.03/USD, setting the greenback on a course to its worst week against the Japanese currency in more than 3 years.

Against the New Zealand Dollar, the Yen went up by 1.6% and against the Australian Dollar, it last bought for $0.6535 or 71.31 Yen.

“I’m not surprised it’s reasserting itself,” said Mayank Mishra, FX strategist at Standard Chartered in Singapore.

“The safe-haven Yen tends to do well even in scenarios when the Japanese economic outlook may be at risk. Unlike the Fed, which may be cutting rates, the Bank of Japan does not have that luxury – so the downward pressure on the currency from the yield channel does not materialize.”