Japan’s currency extended gains after capping its fourth straight weekly advance against the dollar on Friday, as S&P 500 futures dropped. Treasury futures climbed across the escalation of trade tensions between the world’s largest economies saw traders boosting bets on rate cuts from the Federal Reserve.

“The longer the tariffs are in place, the greater the damage it will be for China and global growth,” said Jingyi Pan, a market strategist at IG Asia. “This may benefit the likes of the safe-haven yen.”

The US told China it has a month to secure a trade deal or face tariffs on all its exports, ratcheting pressure after it accused Chinese President Xi Jinping’s government of backpedaling on promises. China has said additional duties imposed should be removed for an agreement, setting the stage for weeks of uncertainty in financial markets after investors had thought a pact was near.

President Donald Trump tweeted early Saturday afternoon that it would be wise for China to “act now” to finish a trade deal with the US, warning that “far worse” terms would be on offer. White House economic director said that “both sides will suffer” from the widening US-China trade war.

The yen strengthened against all its Group-of-10 peers on Monday, rising 0.2% to 109.78 against the dollar. The Aussie weakened 0.2% to 69.90 US cents.

The US hiked tariffs on more than US$200 billion of Chinese goods on Friday, with the Asian nation vowing to retaliate. A week of tense stand-off before crucial talks in Washington led to the yen strengthening by 1%. It touched 109.47 against the dollar on Thursday, its highest since February.

There are three main points of contention between China and the US, Beijing’s chief negotiator told reporters in Washington after talks ended. Other than the need for the removal of additional tariffs, Vice Premier Liu He also said the targets set by the US for Chinese purchases should be in line with real demand, while the text of a deal should be “balanced” to ensure the “dignity” of both nations