USD/JPY Above 101.50 with Reduction in Risk Aversion

The yen dipped against the dollar and euro on Tuesday on a slight reduction in geopolitically-inspired risk aversion that lifted equities across Asia.  Still, markets were unable to fully shake off geopolitical concerns as tensions in the Ukraine and Gaza remained high, keeping the dollar and euro in a narrow corridor against the Japanese currency.

“Geopolitical developments channelled through higher oil prices will remain key theme this week,” said Shinichiro Kadota, chief FX strategist at Barclays Bank in Tokyo.

“Heightened geopolitical risk accompanied by higher oil will help the yen and Swiss franc appreciate while weighing on the Australian and New Zealand dollars. Emerging market currencies from Taiwan, Singapore, Korea, Thailand and India are also vulnerable to higher oil,” he said.

CNBC

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