FX Update: A risk-off sentiment supported the yen and Swiss franc
FX Update: A risk-off sentiment supported the yen and Swiss franc as safe haven currencies and assets came into demand amid an escalation in threatening rhetoric between North Korea and the U.S, with Trump promising Pyongyang "fire and fury." North Korea's development of nuclear warhead carrying ICBM capability is the issue, and the flare up in tensions rattled stock markets across the Asia-Pacific region. USD-JPY dove to a seven-week low at 109.74, and EUR-JPY and other yen crosses also declined sharply The biggest mover among the main currencies was AUD-JPY, which dove over 0.7%, with the relatively high beta Aussie underperforming amid the risk-off vibe. Market participants will be monitoring the geopolitical situation closely in the days ahead. Normally tensions stemming from North Korea's antics tend to simmer down quickly, though the stakes have increased as the rouge nation draws near to developing a credible nuclear weapon threat. Elsewhere in the currency market, EUR-CHF backtracked by over 0.5%, unwinding some of its recent gains and revealing that the franc still has vestiges of being a safe haven currency. EUR-USD logged a 12-day low at 1.1725, extending the correction that's been in play since last week's solid U.S. jobs report, which has fuelled market expectations for the Fed to conduct a quantitative tightening as soon as next month.