FOREX-Dollar favoured safe haven as funds flee virus fallout

* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E
* Tracking the coronavirus: https://tmsnrt.rs/3aIRuz7
* Yen slide calls into question safe-haven status
* Asian funds flock to U.S. assets on virus fears
* China cuts rates again, market impact limited

By Wayne Cole
SYDNEY, Feb 20 (Reuters) - The dollar was sucking up funds
across Asia on Thursday after a steep and sudden slide in the
Japanese yen called into question its safe haven status and
spooked investors out of local assets.
Everything from the Australian dollar to the Indian rupee
were under fire as concerns about the impact of the coronavirus
drove money to the U.S. currency.
China reported a drop in new infections on Thursday, but
scientists warned the pathogen may spread more easily than
previously believed as two elderly passengers from a ship
quarantined in Tokyo became the latest to die. Even another rate cut from China could not steady the
skittish mood. "People are trying to get far away from the economic fallout
that we might see from the coronavirus. You want your capital as
far away from China as possible," said Chris Weston,
Melbourne-based head of research at broker Pepperstone.
"The sentiment continues to be 'buy U.S. assets'," he added.
"Some people are saying if you want a safe-haven currency in the
portfolio you have U.S. dollars now, over the yen."
The yen's fall from grace began Wednesday when heavy and
persistent selling drove the currency down against all its
peers, many making the biggest moves seen in months.
A run of dire economic news out of Japan has stirred talk
the country is already in recession and that Japanese funds were
dumping local assets in favour of U.S. shares and gold.
As a result, the dollar celebrated its largest gain in six
month to stand at 111.38 yen JPY= on Thursday, smashing a
chart barrier around 110.30 that had held firm since last May.
The euro was also taking in the view at 120.21 EURJPY= ,
having climbed 1.5% overnight for its best rise since mid-2017.
The single currency had no such luck on the dollar and remained
pinned at $1.0798 EUR= .
The shift to all things American, saw the U.S. dollar climb
0.3% on the Chinese yuan CNY= to 7.0215 and the Australian
dollar AUD=D3 sink to 11-year lows at $0.6630.
"The critical thing to understand is the Yen weakness is not
so much "Risk on" as it is Japanese asset managers heading for
the Tokyo market exit in droves," said Stephen Innes, Asia
Pacific Market Strategist at AxiCorp.
"With the USD inflow unyielding, its unclear what could stem
this tide other than U.S. administration talking down the
dollar."
U.S. President Donald Trump has long protested that the
dollar was too strong and unfairly penalising U.S. business.

(Editing by Shri Navaratnam)