Concerns over the political crisis that is escalating in Ukraine and worries that China’s economy might be on the verge of a major slowdown have resulted in an increased movement into safe haven currencies. As a result of risk aversion, the Japanese Yen firmed broadly during today’s Asian trading session. According to one forex manager in Tokyo, the real concern is that the combined effects of a Chinese slowdown and now growing pressure in the Russian economy as a result of the Russian government’s move into Crimea have increased concerns that growth in emerging economies could slow further.
As reported at 12:04 a.m. (JST) in Tokyo, the USD/JPY traded at 103.01 Japanese Yen, moving off of last Friday’s 6-week trough at 103.77 Yen. The AUD/JPY fell to 92.30 Yen, down from the 3½ month high struck last Friday at 94.45 Yen while the AUD/USD fell below $0.90.
Australian Woes Weigh on Aussie Dollar
Investor concerns over Chinese growth have led to concerns over Australia’s economy which is heavily dependent on China growth. As a commodity-driven country, Australia’s currency, the Australian Dollar, is also particularly vulnerable when safe haven demand is high. A sharp fall in copper prices, a major Australian export, is also weighing on the Aussie Dollar.