The yen held gains against most major peers from last week as North Korea’s launching of missiles yesterday and lingering tensions in Iraq and Ukraine boosted demand for haven assets.
Japan’s currency was near a one-month high against the dollar after closing last week at a stronger level than the 200-day moving average for the second time since November 2012. The Bloomberg U.S. Dollar Index closed at a seven-week low on June 27 as signs U.S. economic growth is flagging spurred speculation the Federal Reserve will hold record-low interest rates for longer. Australia’s dollar headed for its longest stretch of monthly gains in four years before the Reserve Bank sets policy tomorrow.
“We have yet to see a cease-fire in Ukraine, there’s not much progress in solving the Iraq situation and then there’s the missile launch by North Korea,” said Toshiya Yamauchi, a senior analyst in Tokyo at Ueda Harlow Ltd., which provides margin-trading services. “The geopolitical risks support yen buying. Dollar-yen is expected to trade lower should it fail to recover above the 200-day moving average.”
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