FX Action: USD-JPY has declined in four of the last five sessions
FX Action: USD-JPY has declined in four of the last five sessions now, today logging a new low at 108.50 during the Tokyo session. Last Thursday's low at 108.26 is back in view. The down move has been concomitant with a risk-off backdrop as North Korea takes fresh steps to achieving nuclear ICBM capability. At issue is whether world powers allows Pyongyang to "go nuclear," and, if not, what measures will be taken to stop it. This makes this situation different to the multitude of missile launches or other antics that North Korea would previously get up to, occurrences that would typically spark a flight-to-safety trade in global markets (and/or tailored trades, such as buying South Korean and Japanese defence stocks while shorting the won and yen) before markets would recover their poise as pundits downplayed Pyongyang's antics as self-serving geopolitical gamesmanship. Aside from the Korea factor, the dollar has been trending lower in trade weighted terms for five months now, with the Fed's tightening agenda repeatedly being pushed further down the track, and analysts advice following the USD-JPY's downward path. Resistance is at 108.98-00, and support is at 108.17-26.