USD/JPY hit hard by fire fury on North Korea worries

The mutual threats between the United States and North Korea are taking their toll on markets. Asian stock markets are sliding and the safe-haven yen is in high demand.

USD/JPY dropped to a low of 109.74, countering the gains that were triggered by the upbeat JOLTs report[1] yesterday. The dollar seemed to be on a recovery path.

Military experts in the US said North Korea is working on making its nuclear warheads smaller. Together with their recent long-range missile test which could reach the US, fear is rising. President Donald Trump

President Donald Trump said that North Korean aggression “will be met with fire, fury and frankly, power, the likes of which this world has never seen before”.

It was followed by reports that North Korea would try to attack the island of Guam. There hasn’t been any follow up on these common.

Safe haven flows

All in all, the level of rhetoric is certainly higher and markets are worried. The Swiss franc is also a beneficiary of these worries.

Japan is directly exposed to North Korea. Missiles from the rogue nation can reach Tokyo quite easily. A “normal” currency reaction would be a weakening of the Japanese yen in light of the danger. However, the yen is no normal currency: it is a safe haven currency that gains in times of trouble.

USD/JPY has bounced from the lows, trading around 110. Resistance is at 110.60. Support is at 109.90.

Get the 5 most predictable currency pairs[2]

from Forex Crunch http://feedproxy.google.com/~r/ForexCrunch/~3/g7iNfjWTFfs/

from Online Forex Trading Resource
View thesource article here

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