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US Dollar to Japanese Yen Exchange Rate Slumps to 2017 Low on Political Jitters
Published: 12 Apr at 2 PM Tags: Dollar Exchange Rate, Currency Exchange, Forex, Yen Exchange Rate, Exchange Rates,
The US Dollar to Japanese Yen exchange rate has slumped this week, as rising geopolitical jitters in the US have undermined its sturdiness prompting traders to look elsewhere for ‘safe haven’ assets.
USD/JPY began the week trading at the level of 111.08. However, since Monday the pair has lost over a Yen in value to hit a low of 109.42 on Wednesday morning. This was the lowest level in USD/JPY since November 2016.
US Dollar (USD) Weakened as US Political Uncertainty Rises
‘Safe haven’ appeal is certainly strong this week, but the US Dollar isn’t being counted among their number for once as much of the uncertainty causing markets to avoid risk is coming from the US itself.
Last week saw the US order a missile strike on a Syrian airbase in retaliation to a perceived chemical attack from Syrian officials on Syrian citizens. This worsened diplomatic tension between the US and Syria, as well as Syria allies in Russia.
The past week has also seen US President Donald Trump ramp up criticism towards North Korea, which has strained US-China relations.
With relations seemingly fissuring between the US and key nations like Russia and China, market concerns are rising about US trade relations and what future action the Trump administration may take.
Japanese Yen (JPY) Benefits from Surge in ‘Safe Haven’ Demand
Due to rising political concerns and uncertainty in the US, investors have been hungry for assets considered to be ‘safe havens’. As the Japanese Yen is one of the most popular safe havens on the market it has seen a considerable increase in demand this week.
While market appetite for safe investments has been the main reason for the Japanese Yen’s strength this week, Wednesday’s Japanese data was also generally solid.
Japan’s March PPI results beat expectations year-on-year, rising from 1.1% to 1.4% and beating the expected 1.3%. Monthly PPI came in at 0.2% as predicted.
These reports may have offered the Yen some slight support, though it’s unlikely they had a notable influence on Wednesday’s USD/JPY movement overall.
USD/JPY Forecast: Exchange Rate Could Shift on Friday’s US Data
Geopolitical concerns will of course remain vital to USD/JPY movement in the coming weeks. However, if tensions between US and other nations ease slightly, the US Dollar is likely to quickly recover from its worst levels.
With Japanese data low influence for the rest of the week, USD/JPY will continue to be driven by risk-sentiment and, towards the end of the week, potentially US data too.
Thursday will see the publication of the University of Michigan’s April consumer sentiment survey. Analysts predict it will show that consumer confidence slipped slightly, from 96.9 to 96.5.
Friday’s US data will be even more influential and will include March’s Consumer Price Index (CPI) results, retail sales and average weekly earnings figures.
USD/JPY began the week trading at the level of 111.08. However, since Monday the pair has lost over a Yen in value to hit a low of 109.42 on Wednesday morning. This was the lowest level in USD/JPY since November 2016.
US Dollar (USD) Weakened as US Political Uncertainty Rises
‘Safe haven’ appeal is certainly strong this week, but the US Dollar isn’t being counted among their number for once as much of the uncertainty causing markets to avoid risk is coming from the US itself.
Last week saw the US order a missile strike on a Syrian airbase in retaliation to a perceived chemical attack from Syrian officials on Syrian citizens. This worsened diplomatic tension between the US and Syria, as well as Syria allies in Russia.
The past week has also seen US President Donald Trump ramp up criticism towards North Korea, which has strained US-China relations.
With relations seemingly fissuring between the US and key nations like Russia and China, market concerns are rising about US trade relations and what future action the Trump administration may take.
Japanese Yen (JPY) Benefits from Surge in ‘Safe Haven’ Demand
Due to rising political concerns and uncertainty in the US, investors have been hungry for assets considered to be ‘safe havens’. As the Japanese Yen is one of the most popular safe havens on the market it has seen a considerable increase in demand this week.
While market appetite for safe investments has been the main reason for the Japanese Yen’s strength this week, Wednesday’s Japanese data was also generally solid.
Japan’s March PPI results beat expectations year-on-year, rising from 1.1% to 1.4% and beating the expected 1.3%. Monthly PPI came in at 0.2% as predicted.
These reports may have offered the Yen some slight support, though it’s unlikely they had a notable influence on Wednesday’s USD/JPY movement overall.
USD/JPY Forecast: Exchange Rate Could Shift on Friday’s US Data
Geopolitical concerns will of course remain vital to USD/JPY movement in the coming weeks. However, if tensions between US and other nations ease slightly, the US Dollar is likely to quickly recover from its worst levels.
With Japanese data low influence for the rest of the week, USD/JPY will continue to be driven by risk-sentiment and, towards the end of the week, potentially US data too.
Thursday will see the publication of the University of Michigan’s April consumer sentiment survey. Analysts predict it will show that consumer confidence slipped slightly, from 96.9 to 96.5.
Friday’s US data will be even more influential and will include March’s Consumer Price Index (CPI) results, retail sales and average weekly earnings figures.
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Source: moneytransfer.co.uk