The Japanese yen is the main beneficiary among the major currencies
Trump's decision to slap tariffs on Mexico triggered a risk-off wave in markets as global trade tensions get escalated to a another level amid the lingering US-China trade dispute as well. That helped flows move into haven assets with the yen rising the most with USD/JPY threatening to hold a firm break below the 109.00 handle currently.
The franc is the other beneficiary while the rest of the currencies market were more calm with the dollar barely moving against the likes of the euro, pound, aussie and kiwi.
The Canadian dollar is the laggard as we begin the session as the tariffs on Mexico could potentially derail the USMCA deal. Lower oil prices due to the risk-off sentiment in markets also aren't helping the loonie's case today.
US equity futures are down by 0.8% and Treasury yields are marked significantly lower across the curve, with 10-year yields down 4 bps to 2.173% currently. That is helping to keep the yen well-bid and I reckon this sentiment will continue to linger ahead of US trading.
