The Japanese yen is a safe haven currency, and its status is reflected in the most recent troubles, originating from North Korea, Japan’s neighbor. The yen is in demand with every deterioration but then sold off when the short attention span shifts elsewhere.
The autocratic regime tested an ICBM and the world is worried. It came in defiance of US efforts to control the rogue country. President Trump tried to pressure China to intervene but North Korea’s leader decided to conduct the test on the eve of America’s Independence Day.
The UN Security Council convened in an emergency session. The US and South Korea conducted an emergency drill. It is quite unclear where all this leads, but it certainly moves dollar/yen.
The pair is currently trading around 113.27, in a narrowing range. The peak of the most recent cycle has been 113.50, which it reached when the dollar was enjoying good news and before the missile launch.
The low point of this range is 112.75, a level it hit immediately after the news broke out. Since then, the range is narrowing, but movements remain significant. Where will the pair break out to?
Here is how it looks on the 30-minute chart:
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