The yen rose to its highest level in two months against the U.S dollar Tuesday morning amid simmering tensions between the U.S. and China, with U.S. House Speaker Nancy Pelosi expected to visit Taiwan during her current Asia tour.
The yen advanced to touch the ¥130 level for the first time since early June, after plunging to a 24-year low around the ¥139 zone in mid-July due to deepening of the interest rate gap between the U.S. and Japan.
On top of investors repositioning for less aggressive interest rate rises globally, jitters about the impact of Pelosi's impending visit to Taiwan were also driving some safe-haven flows to the yen while weighing on other Asian currencies and other risk-friendly assets such as stocks.