- Anti-risk yen (JPY) is drawing haven bids on US-Iran tensions.
- USD/JPY is trading at levels last seen on Nov.1.
- US airstrike is a major escalation, experts say.
USD/JPY is flashing red for the fifth straight day and is currently trading at 108.20, the lowest level since Nov. 1.
The pair is fast closing on the 100-day moving average, currently located at 108.14. The anti-risk Yen is drawing haven bids, courtesy of heightened US-Iran tensions.
A US missile strike on Baghdad airport killed Iranian Gen. Qassim Soleimani, the head of Iran’s elite Quds Force and Abu Mahdi al-Muhandis, the deputy commander of Iran-backed militias, Iraqi TV and three Iraqi officials said Friday.
The news has been confirmed by the US officials and experts are calling it a major escalation. “There’s no turning – the US is committing itself to a full-fledged conflict with Iran, one that won’t be confined to Iraq,” Ranj Alalddin, Fellow, Brookings Institution Doha, and Director, Carnegie Corporation tweeted a few minutes before press time.
Therefore, the anti-risk could continue to gain ground – more so, as the futures on the S&P 500 are now reporting a 0.15% drop. The index futures were up more than 0.20% in early Asia.
Further, oil prices on both sides of the Atlantic have picked up a strong bid on heightened geopolitical tensions and could weigh over the emerging market risk assets, adding to the bullish pressures around JPY.
Technical levels