* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
By Daniel Leussink
TOKYO, June 3 (Reuters) - The yen brushed a more than
four-month high against the dollar on Monday as U.S. President
Donald Trump's hard stance on trade broadened to countries
beyond China, forcing investors to safe-haven assets, including
government bonds.
With trade issues remaining front-and-centre, investor risk
appetite has been weighed by fears of a global growth slowdown
that has helped stoke government debt demand and triggered an
equity selloff.
In a recent development, U.S. and Mexican officials were
preparing for trade talks after Trump vowed to impose punitive
tariffs on all Mexican goods in an intensifying dispute over
migration.
"The Mexican news is quite punchy. No one was really
expecting it to the same extent they were with China," said
Chris Weston, Melbourne-based head of research at foreign
exchange brokerage Pepperstone.
"Mexico is a huge trade partner with the U.S.," he said.
Weston added that the news of Trump's tariff treat on Mexico
helped stoke demand for perceived safe-haven currencies, such as
the Swiss franc and Japanese yen.
The yen JPY= was last steady at 108.23 yen per dollar,
paring gains after briefly hitting 108.17, its highest since
Jan. 15. On Friday, it had booked its sharpest daily rise in
more than two years, climbing a little over 1.2% during the
session.
The yen tends to acts as a safe haven in times of
geopolitical and financial turmoil as Japan is the world's
biggest creditor nation.
U.S. and Mexican officials were preparing on Sunday for
upcoming talks aimed at averting a trade clash after Trump said
he will apply 5% tariffs on Mexican goods on June 10 if Mexico
does not halt the flow of illegal immigration across the
U.S.-Mexican border. A day earlier, Mexico's president Andres Manuel Lopez
Obrador had hinted his country could tighten migration controls
to defuse tensions with Trump, saying he expected "good results"
from talks with Washington. Market participants also kept a focus on the trade dispute
between the United States and China, the world's two largest
economies.
A senior Chinese official and trade negotiator said on
Sunday Washington cannot use pressure to force a trade deal on
China and refused to be drawn on whether the leaders of the two
countries would meet at the G20 summit in Japan at the end of
the month to bash out an agreement. The dollar held mostly steady even after benchmark 10-year
U.S. Treasury yields US10YT=RR hit as low as 2.121% early on
Monday, their lowest since September 2017.
The euro EUR= on Monday gained 0.1% to $1.1178, rising for
a second session after tacking on 0.35% on Friday - its first
gain in five sessions.
The Australian dollar AUD=D4 was 0.1% higher at $0.6943,
hovering close to a more than two-week high of $0.6945 last
touched on May 15.
The Mexican peso MXN=D4 , hit by Trump's sudden threat to
impose tariffs on Friday, regained some stability, trading at
19.634 to the dollar, after its 2.5% fall on Friday.
(Editing by Sam Holmes)