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The Japanese yen is in demand Monday as traders flock to the safe haven currency amid concerns over the spread of the pneumonia-like virus in China.
At 03:20 ET (0820 GMT), the dropped 0.2% to 109.08, having fallen as low at 108.73 overnight, the lowest level since Jan. 8. The Futures, which tracks the greenback against a basket of other currencies, was largely flat at 97.68.
The Chinese government extended the week-long new year holiday by three days at the weekend, giving more time for screening and other countermeasures to take effect, but signalling a bigger-than-expected near-term hit to both retail sales and industrial output.
Nearly 2,000 people in China had been infected and 56 killed by the disease, Chinese authorities said Sunday, although reports state that the death toll has since increased to 80.
"According to recent clinical information, the virus's ability to spread seems to be getting somewhat stronger," China's National Health Commission Minister Ma Xiaowei said at a press briefing Sunday, adding that it is infectious in its incubation period, i.e. before symptoms show, making it harder to contain.
The virus apart, markets are bracing for policy meetings later this week at the Federal Reserve and the Bank of England.
“We doubt the Fed will have too much impact on this week,” ING analysts said in a research note, adding that Japanese data this week includes updates on Tokyo CPI, Employment, Industrial Production and Retail Sales.
“At its recent meeting, the Bank of Japan modestly upgraded growth and downgraded its inflation forecasts to leave its complicated monetary policy unchanged. It is hard to see BoJ policy having much impact on the JPY this year,” ING added.
Sterling, the euro, and the dollar were subdued. The Federal Reserve's rate-setting meeting ends on Wednesday while the Bank of England meets on Thursday.
At 03:25 AM ET (0825 GMT), traded 0.1% higher at 1.1031 ahead of the German Ifo business survey and French labor market data, while was flat at 1.3075.
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