Japanese Yen in Favor as Risk Sentiment in Markets Weighed Down by Increasing Coronavirus Cases

The Japanese yen continues to trade strong against the US dollar early on Friday as the risk appetite in markets remains subdued over concerns about the potential economic fallout of the coronavirus outbreak. At the time of writing, USD/JPY is trading around 109.81.

The risk sentiment soured in the previous session after the Chinese province of Hubei reported a sudden increase in the number of infected cases as well as the death toll. For now there remains considerable uncertainty in markets about the extent of the impact that the virus is expected to have on economic growth in China as well as in the rest of the world.

According to a recent Reuters poll economic growth in China is expected to slow down to the weakest pace seen since the 2008-09 financial crisis during the first quarter of 2020. Economic growth in China can only rebound once the virus is effectively contained.

Markets continue to trade uncertain over concerns that China could possibly be under-reporting infected cases and death toll from the virus. On Friday, Hubei reported an additional 4,800+ infected cases and 116 more deaths due to the virus.