The JPY made its biggest gain in two-weeks against USD on Thursday as increasing tensions in Ukraine and weaker-than-expected economic data out of China weakened demand for riskier assets and bolstered demand for safe haven currencies.
Yesterday saw the US Dollar make its first decline against the Yen in nine-days after far weaker-than expected new home sales data out of the USA weighed heavily upon the currency. According to the data, new home sales plummeted to the lowest-level since July last year.
Today the Yen strengthened as the situation in Ukraine deteriorated further as Ukrainian forces took action in the east of the country to remove pro-Russian separatists. The USA has also stepped up its rhetoric against Russia and warned of further sanctions if it does not take more action to help end the crisis.
“The big trigger was the news this morning about escalating tensions in the Ukraine which increased demand for safe havens. Macro-wise, the softer data reports in China and the US did not help,” said a macro strategist at Credit Agricole SA in an interview with Bloomberg.
Russia warned that it would intervene to defend its citizens in eastern Ukraine. Tensions were raised further by news that the US will send 600 troops to the region to conduct military exercises in countries bordering Russia.
Also supporting the Yen was yesterday’s data out of China which showed that the world’s second largest economy saw its manufacturing PMI edge higher but remain under the level which indicates expansion.
Japanese Yen (JPY) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
US Dollar,
,Japanese Yen,102.3900 ,
Euro,,Japanese Yen,141.6120 ,
Pound Sterling,,Japanese Yen,171.8040 ,
Australian Dollar,,Japanese Yen,94.9574 ,
[/table]
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