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FOREX-Yen advances as trade woes, Brexit concerns shake investor confidence

Published 23/05/2019, 10:47 am
© Reuters.  FOREX-Yen advances as trade woes, Brexit concerns shake investor confidence
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* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh

* Brexit crisis further weighs on risk sentiment, lifts yen

* Rise by dollar index stalls as US yields fall on risk aversion

By Shinichi Saoshiro

TOKYO, May 23 (Reuters) - The yen advanced against its peers on Thursday as persistent U.S.-China trade fears and Brexit concerns fanned risk aversion, lifting the safe-haven Japanese currency.

The yen JPY= was 0.1% firmer at 110.240 to the dollar, having pulled back from a two-week low of 110.675 plumbed on Tuesday.

The Japanese currency also rose modestly against the euro, pound and Australian dollar, adding to overnight gains.

Reports that the United States could impose restrictions on Chinese technology company Hikvision renewed market jitters about trade on Wednesday, reversing a relief rally that followed Washington's move to temporary ease curbs against Huawei Technology Co Ltd HWT.UL . deepening Brexit crisis also sapped investor risk sentiment. Pressure on British Prime Minister Theresa May to resign increased after her new Brexit gambit backfired and as a key ally resigned from her cabinet. the currency market appears to have mostly priced in May's eventual resignation, it is now trying to work out who might replace her," said Yukio Ishizaki, senior currency strategist at Daiwa Securities.

"The possibility of someone like Boris Johnson replacing May will heighten prospects of a no-deal Brexit and likely lead to further 'risk off.' The mood in the market is darkening as the Brexit ongoings add to prevailing U.S.-China worries."

The pound GBP=D4 was little changed at $1.2663 after slipping to $1.2625 overnight, its lowest since Jan. 4.

The dollar index against a basket of six major currencies .DXY was steady at 98.064, its rise earlier in the week to a one-month high of 98.134 stalling as U.S. yields declined amid the risk aversion.

The euro EUR= was flat at $1.1154, in close range of a 2-1/2-week low of $1.1142 brushed on Tuesday ahead of the May 23-26 European parliamentary election.

The Swiss franc CHF= , a safe-haven along with the yen, was a shade higher at 1.009 francs per dollar after advancing 0.15% on Wednesday.

The Australian dollar AUD=D4 nudged down 0.1% to $0.6876. (Editing by Sam Holmes)

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