Safe Haven Yen Drifts Lower as Trade Tensions Ease

Investing.com - The safe haven yen drifted lower against the other major currencies on Monday as risk appetite improved after two days of trade talks between the U.S. and China in Washington, which were described as productive.

The dollar pushed higher against the yen, climbing 0.1% to 107.72 by 2:58 AM ET (6:58GMT), while the euro also gained ground against the Japanese currency, rising 0.1% to 118.66.

Trade volumes remained thin with markets in Japan closed for a holiday.

A U.S.-China trade breakthrough had seemed unlikely after President Donald Trump told reporters on Friday he was "not looking" for a partial deal, and Chinese officials unexpectedly cancelled goodwill visits to U.S. farmers.

Over the weekend, the U.S. Trade Representative's office issued a brief statement characterizing the two days of talks with China as "productive." It added that high level talks in Washington would take place in October, as previously planned.

China's Commerce Ministry, in a brief statement, described the talks as "constructive", and said they had also had a good discussion on "detailed arrangements" for the talks in October.

Additionally, the U.S. removed tariffs from more than 400 Chinese products in response to requests from U.S. companies.

Despite the improved tone, markets still remain unconvinced about the possibility of deal soon.

Against a basket of currencies the dollar was mostly flat around 98.18 and it was little changed against the euro at 1.1008.

The British pound was down 0.14% to 1.2457, after toppling on Friday from a two-month high on Friday as hopes for a Brexit deal soured. On Monday, British Prime Minister Boris Johnson also cautioned against the likelihood of a breakthrough.

-- Reuters contributed to this report

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