The yen traded near a more than two-month high to start 2016 amid demand for haven assets as tensions escalated between Saudi Arabia and Iran after the execution of a prominent Shiite cleric.

Japan’s currency held its biggest monthly gain versus the dollar since January 2014 after Saudi Arabia cut diplomatic ties with Iran following an attack by protesters on its embassy in Tehran. Concern that China’s economy remains anemic added to risk aversion after a fifth month of contraction in factory activity.

The yen traded at 120.26 per dollar as of 8:46 a.m. in Tokyo, after earlier reaching 120.04. It touched 120.01 on Dec. 31, the highest since Oct. 22, rising 2.4 percent over the month. Japan’s currency was at 130.53 per euro.

Source: Bloomberg