The yen has started 2016 as the currency of choice for investors rattled by a change in China’s approach to the yuan and oil prices sliding to a 12-year low.

Japan’s currency has strengthened 2 percent against the greenback this year, extending its advance on Tuesday after oil dropped below $30 a barrel. Gains were muted by an advance in U.S. stocks and after Chinese authorities stepped up efforts to stabilize the yuan. Australia’s dollar was within 1 percent of a four-month low before data that economists say will show Chinese imports and exports contracted in December.

The yen dropped 0.2 percent to 117.87 per dollar as of 9:40 a.m. in Tokyo and was little changed at 127.71 per euro. The dollar rose 0.2 percent to $1.0835 per euro.

The 14-day relative-strength index for the yen against the dollar was at 31 after being below 30 for five days through Tuesday as the yen jumped last week by 2.8 percent, the most since August 2013. A reading below 30 is a signal to some traders that a currency pair is poised to reverse direction.

The Australian dollar rose 0.3 percent to 70.09 U.S. cents after dropping to 69.28 cents on Jan. 11, the lowest since Sept. 8.

Source : Bloomberg