Yen Loses Gains Caused by Iran’s Attack on US Military Bases

The Japanese yen surged intraday on the news that Iran attacked US military bases in Iraq. But the resulting risk aversion waned quickly as investors continued to hope that the United States and Iran will avoid war. Reacting to such hopes, the yen reversed its gains and is now trading below the opening level. Domestic macroeconomic data was not helpful either as reports were not particularly good, and some of them missed expectations.
Iran fired over a dozen missiles at US military facilities situated in Iraq in a response to a US drone killing Iranian military leader on Friday. Markets demonstrated a muted reaction to the news as both US and Iranian officials signaled that they want to avoid escalation of the conflict into an outright war. The market sentiment calmed down further after reports that the attack did not result in any casualties.
As for macroeconomic data, Japan’s Ministry of Health, Labour and Welfare reported in its Monthly Labour Survey for November that average cash earnings fell 0.2%, year-on-year, after showing no change in the previous month. The actual reading matched forecasts. According to a report from the Cabinet Office, the Consumer Confidence Index improved to 39.1 in December from 38.7 in the previous month. Despite the increase, though, the figure missed the median forecast of 39.6.
USD/JPY rallied from 108.44 to 108.73 as of 13:47 GMT today after sinking to the session low of 107.65 earlier. EUR/JPY traded at 120.89 after opening at 120.95 and falling to the daily low of 120.17. GBP/JPY was up from 142.23 to 142.45, bouncing from the session minimum of 141.12.

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Original from: www.earnforex.com