atans1

Do FX traders know their geography?

In Currencies on 12/08/2017 at 4:48 am

East Asian equity markets (including Tokyo) are weak because of the KPKBing between the two brats, one young, one old. Wonder if Trump sees in Kim his younger self?

But strangely, the yen is seen as a safe haven. like the Swiss franc.

So is Japan not N Korea’s neighbour and seen as an enemy?

Maybe Chris K who has managed capital markets team can explain? Maybe FX traders are the last burrow boys?

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  1. May seem so but there is a method behind the madness. JPY has assume safe haven status in recent years when there are geopolitical risks. However in this case, there is also an assumption given the huge net external position of Japan, any physical loss due to natural or man made catastrophe like this one potentially, result in repatriation of foreign assets, hence a reversion into JPY. One thing to note about this latest dick size competition between the two twits, there has so far been no threats being made to Japan even tho the NKs did say their missiles fly over Hiroshima and Shimane prefectures on the way to Guam (too high at that stage if the flight to be intercepted by American THAADs and Japanese PAC3s).

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