Safe haven assets including the Japanese Yen traded higher on Monday morning after U.S. President Donald Trump unexpectedly threatened to increase China tarrifs.
On Friday, President Trump had cited progress in trade negotiations. However, on Sunday his tone shifted abruptly, saying he would raise U.S. tariffs on $200 billion worth of Chinese goods this week and target $325 billion more soon.
He announced the move on his medium of choice, Twitter:
For 10 months, China has been paying Tariffs to the USA of 25% on 50 Billion Dollars of High Tech, and 10% on 200 Billion Dollars of other goods. These payments are partially responsible for our great economic results. The 10% will go up to 25% on Friday. 325 Billions Dollars….
— Donald J. Trump (@realDonaldTrump) May 5, 2019
USD/JPY gapped lower as investors flocked to buy the Japanese Yen, while other havens such as gold and the Swiss Franc also surged.
Asian stocks plummeted on the news and and European and U.S. equities are also trading lower in early Monday trading.