The yen rose from a three-week low against the dollar on Thursday after China’s Hubei province, the epicenter of a coronavirus outbreak, reported a sharp jump in the number of new cases in a jolt to markets and sparking a flight for safe-haven assets.

The Chinese yuan slipped against the dollar in offshore trade, while stocks in Asia also faltered as the latest update on the spread of the virus provided a grim reminder to investors that the epidemic remains a potent threat to the global economic outlook.

Hubei on Thursday reported 14,840 new cases as of Feb. 12, up from 1,638 new cases on Tuesday, with the number of deaths in the province rising a sharp 242 to 1,310.

Hubei’s health commission said it started including cases diagnosed with a new method. Uncertainty about the virus, which emerged in Hubei’s capital Wuhan late last year and has spread to 24 other countries, has shaken up markets over the past weeks.

“When you see numbers like this, you can’t help but move to risk-off trades, which means buy the yen and sell stocks,” said Ayako Sera, market strategist at Sumitomo Mitsui Trust Bank in Tokyo.

“If the authorities can reasonably explain this, things might calm down, but I expect risk aversion to continue.”

The yen JPY=EBS rose 0.18% on Thursday to 109.90 yen, pulling back from its weakest since Jan. 21.

In the offshore market, the yuan CNH=D3 fell 0.16% to 6.9840 yuan.

The Australian dollar AUD=D3, widely used as a proxy for risk on Chinese assets, fell 0.21% to $0.6724, while the New Zealand dollar NZD=D3 dipped 0.2% to $0.6452.

Both Australian and New Zealand have extensive trade ties with China, with trade in commodities, tourism and education especially vulnerable to disruption from the virus.

The World Health Organization has likened the epidemic’s threat to terrorism, underscoring the anxiety in financial markets about its impact across businesses and trade worldwide.

Chinese policymakers have implemented a raft of measures to support the economy as fears grow the coronavirus outbreak could have a damaging impact on growth in the Asian giant and globally.

Source: Reuters