U.S. President Donald Trump warned on Friday that he was ready to slap tariffs on virtually all Chinese imports into the United States, threatening duties on another $267 billion of goods in addition to the $200 billion already facing the risk of duties.
"If there are any signs that the U.S. economy is finally hit by its own protectionist moves, then I think that's the start of full-blown risk aversion," said Masafumi Yamamoto, chief currency strategist at Mizuho Securities.
"This will at least lead to the weakness of the dollar against the yen," Yamamoto said. He warned markets didn't yet fully price in the impact of U.S. tariffs on virtually all imports from China.
Investors have been waiting for a fresh salvo to be fired in the Sino-U.S. trade war after a public comment period for proposed U.S. tariffs on a list of $200 billion worth of Chinese imports, which includes some consumer products, ended late last week.
The yen strengthened as revised gross domestic product for April-June showed Japan clocked an annualised growth rate of 3.0 percent, much faster than a preliminary estimate of 1.9 percent growth last month.
The strong data further supported the prospect of faster rate rises by the Federal Reserve, boosting demand for the dollar.
The Fed is all but certain to raise rates a third time this year in late September.
The Australian dollar was 0.06 percent higher at $0.7110, coming off a more than 2-1/2-year low of $0.7097 touched in early trade as trade-related tensions continued to weigh on commodity-linked currencies.
China's offshore yuan strengthened 0.1 percent to 6.867 per dollar. It weakened more than 0.3 percent during the previous trading session on fears of a possible escalation in the China-U.S. trade conflict.
(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)