Dollar was pulled down by a much stronger yen following North Korean missile that flew over Japan

Dollar surges

The U.S. dollar touches its most depressing level since April 18 against the Japanese yen on Tuesday’s opening. This is after North Korea launched a missile that flew over Japan which adds up to the heightened tension last month.

On the same day, Japan and South Korea sharply said the estranged nation launched a missile that passed over northern Japan and landed in the Pacific waters of Hokkaido.

Daiwa Securities’ FX strategist Mitsuo Imaizumi immediately suggested that the dollar/yen intraday lows are in reaction to the North Korean missile news, given on the showed patterns in which the yen gained indices. Mitsuo added that the pair reduced some of the declines when the released reports showed the missile actually passed over Japan.

The U.S. dollar edged down as low as 0.55 percent versus the Japanese yen at 108.660 yen. The greenback was dragged down to a four-month low at 108.330. The fired missile made a risk-averse prevail in Japan which also resulted to the Nikkei dropping to its lowest level since April 18.

Financial stress and geopolitical crisis is somehow supporting the save-have currency yen because Japan is considered to be the largest creditor in the world. There are also expectations that investor’s form the nation will send funds back to their country if the tensions in the Korean Peninsula continues to rise.

In other currency news, the euro also fell against the Japanese yen by 0.6 percent to 130.040 yen. The common currency was pulled down from the three-week high of 130.965 touched overnight.

 

 

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