Currency News: Yen Benefits From Geopolitical Concerns

Currency News:

Currency

The yen is the official currency of Japan. It is the third most traded currency in the foreign exchange after the United States dollar and the euro. On Wednesday, the dollar slipped against the yen as a result of rising tensions between the United States and North Korea. The day prior, North Korea claimed to have launched its first intercontinental ballistic missile. If true, North Korea has taken a significant step towards developing a nuclear weapon that is capable of reaching the United States. In response, armed forces from South Korea and the United States held a joint drill. In addition, the Pentagon was quick to condemn the missile test and said it was prepared to defend both the United States and its allies. With Secretary of State Rex Tillerson promising that the act would be brought before the United States Security Council. During times of heightened global uncertainty, the yen tends to be bought back. This happens because of expectations Japanese investors may repatriate their foreign investment, despite Japan’s proximity to North Korea. In the past, markets have shown the ability to quickly move beyond periods of tension on the Korean peninsula following short bouts of risk aversion.  

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