The dollar rises against the yen, retreating from the nearly 4-month low reached last week as a result of mounting tensions between the United States and North Korea.
The news for the USD are not good, which may mean that this morning's growth is only a correction for the medium-term downward movement: weaker-than-expected US inflation figures for July, which has faded expectations for further interest rates hike by Fed this year, and geopolitical tension is still against the dollar.
"This uncertainty will not disappear right away," said Masafumi Yamamoto, Mizuho Securities chief currency strategist in Tokyo.
"If the tension escalates further, then there will be an increased risk of falling to levels below 108 yen," he said.
In the last few months, the dollar is traded in the range of 108 - 115 yen and has technical support of around 108.13 yen. The fall below this level may lead to a more serious downward impulse.
Chinese President Xi Jinping said on Saturday that a peaceful resolution on the North Korean nuclear issue had to be reached and in a telephone call with US President Donald Trump, he called on all parties to avoid words or actions that cause tension.
The yen is often sought in times of geopolitical tension or global financial stress, partly because Japan is the world's largest creditor country, and there is a suggestion that Japanese investors will repatriate their foreign participations in times of increased global uncertainty.
On the other hand, data show that Japan's economy has grown by 4.0% in April-June, the fastest rate of growth from January to March 2015, which may also support JPY
Bloomberg
Head of Stocks Trading Stefan D. Angelov
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