The safe-haven yen remained in demand on Wednesday as investor caution prevailed due to fresh U.S.-Europe trade tensions and the International Monetary Fund’s downgrade of its global economic outlook.

Most major currencies were locked in narrow trading ranges as market participants largely kept to the sidelines ahead of a crucial Brexit summit meeting and a rate decision by the European Central Bank later in the day.

Broader sentiment in the market remained subdued as the flare-up between the United States and Europe added to other potential global flashpoints over trade, including Sino-U.S. negotiations.

“Now, there are battles on two fronts for the U.S.,” said Bart Wakabayashi, Tokyo branch manager at State Street Bank.

“If they’re going to be driving the global economy, it’ll be inherently more difficult if they’re fighting all these trade wars… on multiple fronts,” he said.

Against a basket of key rival currencies, the dollar drifted slightly higher to 97.036.

The dollar was a shade lower at 111.135 yen. From a more than three-week high of 111.825 brushed on Friday, the U.S. unit has fallen almost two-thirds of a percent.

Daiwa Securities senior currency strategist Yukio Ishizuki said the Japanese currency found further support ahead of an unprecedented 10-day holiday from late April to early May in Japan to mark the ascension of the new emperor, Crown Prince Naruhito.

“Above anything else, Japanese companies are conservatively managing operations. At the current stage, many of them will naturally be selling the dollar,” Ishizuki said.

“It’ll be easy for the yen to strengthen until the 10-day holiday is over,” he added.

The Australian dollar was up 0.1 percent at $0.7129, erasing an earlier loss after it found support on a speech from a senior Australian central bank official.

The Reserve Bank of Australia is keeping a close eye on how the divergence between a seemingly slowing economy and a strong labour market resolves itself to help determine where policy rates are headed, Deputy Governor Guy Debelle said.

On Monday, the U.S. Trade Representative proposed a list of European Unionproducts ranging from large commercial aircraft and parts to dairy products and wine on which to slap tariffs as retaliation for European aircraft subsidies.

The IMF on Tuesday slashed its global growth forecasts for 2019 to 3.3 percent, the slowest expansion since 2016 and from its earlier projection of 3.5 percent in January.

The global lender said a sharp downturn could require world leaders to coordinate stimulus measures.

Investors’ immediate focus on Wednesday will be on the ECB rate decision, a news conference by ECB President Mario Draghi and the release of minutes of the Federal Reserve’s last policy meeting.

Ahead of the Brexit summit meeting, the euro and sterling were largely unchanged, trading at $1.1258 and $1.3052, respectively.

European Union leaders will likely grant Prime Minister Theresa May a second delay to Britain’s exit from the EU but they could demand she accepts a much longer extension as France pushed for conditions to limit Britain’s ability to undermine the bloc.

The latest IMF forecasts, together with a pullback in oil prices, put pressure on commodity-linked currencies such as the Canadian dollar.

The loonie was a shade weaker at C$1.3334 after retreating overnight from its strongest level since March 21.