· The dollar fell to a two-week low against the yen on Monday as a latest flare-up in global trade concerns dented investor risk appetites and drove down U.S. yields.
The greenback was down 0.4 percent at 109.54 yen JPY= after dropping to 109.45, its weakest since June 11.
Investors steered from risk, with Asian equities in retreat and Treasury yields declining, after the Wall Street Journal reported the U.S. Treasury Department is crafting rules that would block firms with at least 25 percent Chinese ownership from buying U.S. companies involved in “industrially significant technology”.
The report added to the sense of caution felt after U.S. President Donald Trump on Friday threatened to impose a 20 percent tariff on all cars imported from the European Union. The EU responded by saying it will have no choice but to retaliate to such a move.
The dollar index against a basket of six major currencies stood at 94.559 .DXY having retreated from 95.529, its highest level since July 2017, scaled early on Friday.
The greenback had climbed to the 11-month peak as higher U.S. yields underlined the divergence in monetary policies between the United States and Europe.
The dollar, however, began to sag toward the end of last week as U.S. yields lost their lift amid heightened trade tensions between Washington and the European Union. The 10-year Treasury note yield US10YT=RR fell to a one-week low of 2.871 percent on Monday.
The euro was steady at $1.1654 EUR= after gaining about 0.5 percent on Friday. The single currency was lifted after Friday's upbeat German and French business activity data and fresh assurances by Italian politicians that their nation would not leave the single currency.
· The U.S. Treasury Department is drafting curbs that would block firms with at least 25 percent Chinese ownership from buying U.S. companies with “industrially significant technology,” a government official briefed on the matter said on Sunday.
The official, whose comments matched a report by the Wall Street Journal, emphasized that the Chinese ownership threshold may change before the restrictions are announced on Friday.
The move marks another escalation of President Donald Trump’s trade conflict with China, which threatens to roil financial markets and dent global growth.
· Tariffs on $34 billion worth of Chinese goods, the first of a potential total of $450 billion, are due to take effect on July 6 over U.S. complaints that China is misappropriating U.S. technology through joint venture rules and other policies.
· The United States will soon present a timeline to North Korea with “specific asks” of Pyongyang after a historic summit between U.S. President Donald Trump and North Korean leader Kim Jong Un, a senior U.S. defense official said.
· China and the European Union aim to conclude talks on a bilateral investment agreement, Chinese Vice Premier Liu He said on Monday, as both sides agreed to oppose protectionism and defend the global multilateral trading system.
China hopes the E.U. will take concrete steps to ease restrictions on European exports to China, said Liu in remarks in a joint press conference with E.U. Commission Vice President Jyrki Katainen in Beijing.
Katainen in his remarks called on China to ease market access restrictions and tackle the issue of steel overcapacity.
· Prime Minister Shinzo Abe’s support rose 10 points to outstrip his disapproval rating for the first time since February, a survey showed on Monday, boosting his chance of weathering a series of scandals to become Japan’s longest-serving premier.
· Oil prices fell on Monday as traders factored in an expected 1 million barrels per day (bpd) output increase in the wake of an Organization of the Petroleum Exporting Countries (OPEC) meeting in Vienna last week.
Despite this, analysts said global oil markets would likely remain relatively tight this year.
Brent crude futures LCOc1 were at $74.25 per barrel at 0636 GMT, down 1.7 percent from their last close.
U.S. West Texas Intermediate (WTI) crude futures CLc1 were at $68.42 a barrel, down 0.2 percent, supported more than Brent by a slight drop in U.S. drilling activity and a Canadian supply outage.
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