Yeni Higher After North Korea Missile Launch

North Korea

After the Tuesday`s North Korea missile launch the yen gained and the Australian dollar went down, not meeting expectations of the speculators. The dollar lowered 0.4 percent comparing with the seven week stable high rate.

On Tuesday North Korea launched a missile, which as Tokyo mentioned, have landed in its Exclusive Economic Zone. Pyongyang said that later more news would be coming on the matter.

“The yen gained as North Korea’s actions came just ahead of the G20 summit scheduled this weekend and cooled risk sentiment,” Kyosuke Suzuki, director of forex at SocieteGenerale in Tokyo, announced.

“Dollar/yen is still confined in reasonable range right now. The market will want to see what North Korea’s announcement is about before deciding if further gains by the yen are warranted.”

The Japanese yen bounced backagainst other major currencies.

The euro was down 0.6 percent at 128.105 yen EUR/JPY. The sterling also fell 0.4 percent to 146.12 yen.

The Australian dollar got its strongest since March 21- 86.96 yen AUD/JPY.

The central bank of Australia has been supporting a neutral position on the economy and interest rates on Tuesday, although others have been more decisive to tighten policy.

It was not a surprise that the RBA would choose not to change interest rates; still “currency bulls” were disappointed.

While the dollar stood firm against other rivals, but slipped against the yen.The dollar index against the six major currencies basket was steady at 96.254.
Last week as expectations increased that European and Canadian central banks would eventually opt for a tight monetary policy, the US dollar was hit hard.

“The dollar’s latest rise is driven by direct demand, as opposed to the U.S. currency gaining thanks to the weakness of its peers,” said Shin Kadota, aTokyoBarclayssenior strategist.

“Expectations towards the Federal Reserve hiking interest rates later this year had perhaps sunk too low. We are now seeing such lowered expectations being reversed a little.”

The euro currency keptlosing overnight and was 0.2 percent down at $1.1343.

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