The downing of a Malaysian passenger jet along the border of Russia and the Ukraine, as well as an escalation of geopolitical tensions in Israel and Gaza have sent investors rushing to the Japanese Yen, pushing the safe haven currency higher by 0.5% against the U.S. Dollar and to a 5-month peak versus the Euro. The downed aircraft was said to have been committed by pro-Russian rebels, however both sides in the conflict have denied any involvement. The rise in geopolitical tensions has weighed on higher risk assets and currencies and drove up safe haven assets.
As reported at 12:02 p.m. (JST) in Tokyo, the USD/JPY was trading at 101.205 Yen, recovering slightly from the earlier 0.5% fall; if the pair breaks below 101.06 Yen, analysts say that would put the U.S. Dollar at a 2-month trough. The EUR/JPY, down 0.9% for the week thus far, held close to a 5-month trough at 136.715 Yen. The EUR/USD sunk to a 1-month low and was trading at $1.3512.
BOJ Minutes Give Yen Demand a Breather
Despite the high demand for the safe haven currencies which drove up the Yen’s value, the latest release of the minutes by the Bank of Japan helped to weaken the Yen to 101.26 Yen. Some members of the BOJ broad cautioned that global competition and local production was impacting exports.