Yen Climbs Amid Concerns Over China’s Virus Outbreak
- Investors retreat into safe-haven yen amid concerns over possible global pandemic
- Six dead from mysterious coronavirus in China
- World Health Organization calls emergency meeting
Tuesday saw the Japanese yen climb as the death toll in China caused by the viral outbreak increased to six. Investors retreated into the safe-haven currency amid fears of a repeat of the 2002 SARS epidemic.
The yen was trading at 109.97 against the US dollar, equating to a 0.2% increase. The Chinese yuan suffered, sliding by 0.6% to trade at 6.9072 against the USD. This marks the most significant daily decline since August 26, 2019.
European shares also slipped somewhat, with many luxury companies taking the brunt of the decline. This is over concerns that the Chinese market’s demand for luxury products may weaken.
Chinese authorities report a surge in new infection cases
In December, an outbreak of a new coronavirus started in the city of Wuhan in the Hubei province. Researchers discovered a link between the virus and a live-animal market in Wuhan. They also concluded that the coronavirus was completely new.
Prior to this weekend, experts believed the situation would quickly be resolved. On January 1, Wuhan authorities shut down the market to decontaminate it. There was also no evidence that the virus could be transmitted from person to person. However, over the past few days, the situation has escalated, with the number of confirmed cases more than tripling. The virus has also spread to new cities, and cases have also been reported in a few other countries.
At the end of Monday, the Chinese National Health Commission stated that they had identified 291 confirmed cases. On Tuesday, though, China’s provinces sent in the latest data, showing that the virus is spreading.
In Wuhan, 258 cases were confirmed, as well as six deaths. Guangdong reported 14 cases, Beijing five, and Shanghai two. The virus also reached the Zhejiang, a province in the east, and Tianjin, a city in the north. They reported five and two cases, respectively.
The infection has spread to other countries as well. Japan, South Korea, and Taiwan each reported one confirmed case, while Thailand has identified two cases. The Philippines stated they suspect they might have their first case.
The virus exhibits symptoms such as fever and respiratory distress, and it can cause pneumonia. But, as many other respiratory diseases cause similar symptoms, additional tests are required to confirm the presence of this specific virus.
Chinese researchers already confirmed the virus could pass from human to human, with 15 medical staff being infected. The spread of the infection further supports this conclusion.
Concerns arise of a global pandemic
The Lunar New Year is on Saturday, January 25. While normally a cause for celebration, authorities are concerned. Hundreds of millions of people travel for the holiday, which could accelerate the spread of the virus.
The outbreak has many remembering the Severe Acute Respiratory Syndrome (SARS) breakout from 2002 that also started in China. Some fear a similar situation might arise with this new coronavirus.
On Monday, the World Health Organization called an emergency meeting for Wednesday. At the meeting, the WHO will decide whether to declare an international health emergency. It’s likely they will also be discussing the possibility of travel and trade restrictions.
The United States Center for Disease Control started screening passengers on direct and connecting flights from Wuhan on January 17. Many Asian countries have followed suit, including Singapore, Japan, South Korea, and Thailand. According to Reuters, the WHO has already issued directives to hospitals all over the world on preventing and controlling the infection. Currently, there is no vaccine for the virus as little is known about it.
Experts worry the outbreak will cause economic problems. Rajiv Biswas from IHS Markit says the situation “is developing into a major potential economic risk to the Asia-Pacific region now that there is medical evidence of human-to-human transmission.”
The National Health Commission will hold a press briefing on Wednesday at 10am local time to provide updates on the situation.