Yen Hits 5-Month Highs As Investors Seek Safety

Includes: FXY, JYN, YCL, YCS

The yen hit five-month highs against the dollar and the euro on Wednesday as concerns over heightened geopolitical tensions curbed risk appetite.

Investors continued to play it safe as concerns over U.S. military action against Syria and North Korea along with worries over the French presidential election spurred investors to move money into assets perceived as less risky.

USD/JPY hit 109.35, the lowest level since November 17 and was at 109.70 by 07.21 GMT.

Chinese President Xi Jinping on Wednesday called for a peaceful resolution of escalating tensions on the Korean peninsula during a call with U.S President Donald Trump.

Tensions continued to mount amid fears that North Korea could soon conduct fresh nuclear tests or missile launches.

Trump, who has urged China to do more to rein in North Korea, has said the U.S. is prepared to take action against North Korea, with or without Beijing’s help.

At the same time, tensions between the U.S. and Russia simmered following last week's U.S. cruise missile strikes on a Syrian air base.

The euro plumbed fresh five-month lows against the Japanese currency on Wednesday, with EUR/JPY last at 116.50 after falling to 115.94 overnight.

Sentiment on the single currency was hit after far-left candidate Jean-Luc Melenchon surged in French polls ahead of the May presidential election, adding to uncertainty over the outcome.

The euro pushed higher against the dollar, with EUR/USD rising 0.14% to 1.0619.

Sterling also fell to a five-month low against the yen, with GBP/JPY touching a low of 136.5, but remained supported against the dollar, with GBP/USD at 1.2497.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, ticked down to 100.55.

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