FX Update: USD-JPY dove to a new eight-week low
FX Update: USD-JPY dove to a new eight-week low, this time at 108.90, and EUR-JPY fell to a one-month low at 128.18 as the yen continued to rally as investors flocked to safe haven assets and currencies. The Swissie has been relatively soft, weakening over the last day versus the yen, illustrating that Swiss currency has lost a lot of its shine as a safe haven currency relative to historic norms. Trump doubled down on his threats to North Korea and maintaining edgy market sentiment, with Wall Street and stock markets in Asia taking a fresh beating and the Vix volatility index hitting a nine-month high. Military action is by no means assured, though this tensions with Pyongyang seem more climactic than in the past. Markets look set to remain choppy, caught in a binary risk-on/risk-off reaction function depending on how developments evolve. USD-JPY has initial resistance at 109.44-45, while the June-14 low at 108.81 and the April low at 108.12, the latter being a nine-month low, provide downside waypoints. EUR-USD has settled around in the mid 1.17s, gaining ground amid a generally weaker dollar after U.S. data disappointments yesterday.