No Demand for Safe Haven, Yen Retreats Ahead of BoJ Meeting

The Japanese yen was weak today ahead of tomorrow’s policy meeting as markets largely ignored escalating trade tensions between the United States and China, lowering demand for the currency as a safe haven.
The USA confirmed that it is going to slap new tariffs on Chinese goods equal to $200 billion of worth. As was expected, China announced a retaliatory tariffs on US goods. While risk aversion surged after the announcement, markets quickly calmed down and switched to a risk-on mode.
The Bank of Japan will hold a policy meeting during tomorrow’s Asian session. Experts do not anticipate any changes to the existing monetary policy. Instead, traders will watch for how the central bank is going to react to the current geopolitical environment. Analysts expect the BoJ to choose a cautious approach, which will likely hurt the yen.
USD/JPY gained from 111.83 to 112.35 as of 18:34 GMT today, trading near the highest level since July 20. EUR/JPY advanced from 130.68 to 131.12. GBP/JPY was up from 147.12 to 147.64.

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