Investing.com - Investors will be looking ahead to Friday’s U.S. jobs report for May for sign of strength in the labor market as the escalating global trade war continues to buffet the global economy.

The week will also bring monetary policy updates from a number of central banks, including the European Central Bank and U.S. President Donald Trump’s state visit to the U.K.

The yen saw its best day against the dollar in four months on Friday, after U.S. President Donald Trump’s threat to impose tariffs on Mexico roiled financial markets and stoked recession fears.

Taking aim at what he said was a surge of illegal immigrants across the southern border, Trump vowed on Thursday to impose a tariff on all goods coming from Mexico, starting at 5% and ratcheting higher until the flow of people ceases.

The Mexican peso tumbled against the greenback, losing as much as 3.4% at one point, for its steepest single-day loss since October.

Trump’s surprise duties on Mexican imports “spurred sharp losses in the Mexican peso and a general risk-off move that strengthened the yen,” said Marc Chandler, chief market strategist at Bannockburn Global Forex LLC.

Several different currencies have served as safe havens during the global trade conflict, but the yen has consistently been among the strongest this year, and on Friday investors appeared to opt for the Japanese currency.

The dollar fell 1.19% to 108.28 per yen. For May, the Japanese currency gained 2.72% against the dollar.

The Swiss franc also enticed safe-haven buying, rising 0.67% at 1.0006, near its strongest versus the dollar since April 10.

The impact of escalating trade tensions between Washington and Beijing is starting to show up in economic data, with a key measure of Chinese manufacturing activity disappointing investors, and Trump’s latest salvo fuelled a rush on Friday to safe-haven assets such as government bonds and the yen.

The U.S. dollar has itself served as a safe haven currency in recent times, but on Friday, it fell 0.39% against a basket of other currencies, hovering below a two-year peak reached last week. For the month, the dollar index gained 0.4%, extending its winning monthly streak to four.

“The U.S. dollar may be embarking on a major turning point,” said Jack McIntyre, portfolio manager at Brandywine Global.

The dollar’s broad losses on Friday were compounded by comments from senior policymakers, with the U.S. Federal Reserve Vice Chair Richard Clarida on Thursday discussing the possibility of rate cuts should the world’s biggest economy take a turn for the worse, though he also said he thought the U.S. economy is in “a very good place”.