Trump’s unexpected decision to impose 10% tariffs on Chinese goods worth $300 billion with effect from September 1 has caused a rally in safe haven assets. On Thursday, while GOLD rose nearly 2% higher, the Japanese yen also gained strength and touched a one-month high against the US dollar.

At the time of writing, USD/JPY has steadied itself to trade at around 107. The dollar had lost 1.3% of its value against the yen on Thursday over reignited trade tensions driving uncertainty in the global financial markets.

In addition to the increased appetite for safe haven assets, expect volatility to increase in stock markets and bond yields around the world. This increased volatility could drive further weakness in the US dollar and help boost the Japanese yen’s attractiveness as an instrument to invest in.

For now, markets appear to be in a wait-and-see mode to find out how China is going to react to this latest round of tariffs.