The dollar strengthened against the yen at the Tokyo opening on Thursday (29 / Mar) this morning, posting its highest daily gain in more than half a year, and extending a rebound from the 16 1/2 month low reached on Monday. However, when this news was written at 09:00 GMT, USD / JPY seems to continue extending further above 107. The currency pair is moving down and trading at 106.57.
Denuclearization of North Korea
The slackening of geopolitical tensions in Asia keeps the US Dollar back on track. Last Wednesday, China made a statement that North Korean President Kim Jong Un pledged to uphold its commitment to denuclearization. Meanwhile, Donald Trump chirps on his Twitter account that Kim Jong-Un is looking forward to meeting him.
The Japanese daily Asahi reported today that Tokyo has submitted plans for a bilateral meeting with the North Korean government. The news comes a few days after Kim Jong Un's meeting with Chinese President Xi Jinping. The phenomenon of meetings among these leaders sparked speculation among traders that a diplomatic breakthrough on North Korea's nuclear program has been one step ahead. However, many are realizing that reaching a solution to the North Korean nuclear conflict is not easy.
End of Fiscal Year In Japan
Regardless of the geopolitical sector, some other traders note that currency trading in this week is also affected by the quarter closing period. For companies in Japan, March 31 is the end of the fiscal year.
"There are a lot of noises appearing this week," said Bart Wakabayashi, State Street Manager, "the end of the quarter and the end of the financial year has a slightly larger effect than usual."
Traders said that the USD / JPY decline could reflect Dollar selling by Japanese exporters before the end of the financial year. Meanwhile, Wednesday's gains stemmed from buying from Japanese investors to welcome the new financial year.
