Yen Trades Higher on Safe-Haven Demand on Russia Tensions

by on April 25, 2014 10:00 am BST

The Japanese yen has seen a lot of action this week as tensions between Ukraine and Russia continue to escalate, as Ukraine demands reasoning from its neighboring country on why military drills are being done on their borders. If Russian does not meet requests, Ukraine said it is prepared to fight Russian troops.

US Secretary of State John Kerry accused Russian President Vladimir Putin of being a bully while failing to follow through with de-escalation set forth in Geneva a week ago. As Russian troops pile up on the borders of Ukraine, and pro-Russian separatists/Russian military causing havoc in Eastern Ukraine, Western leaders promised additional sanctions on Russia. “If Russia continues in this direction, it will not just be a grave mistake, it will be an expensive mistake,” said Kerry.

The yen has also seen gains in early European trade as data shows that the Tokyo consumer price index (CPI) rose to its highest levels in more than two decades at 2.8 percent – higher than the Bank of Japan’s two percent target. With inflation quickly rising, it is unlikely the central bank will implement addition stimulus anytime soon.

The yen is up .11 percent, while gold is trading higher by $2.90 to $1,293.5 per ounce. US 10-year treasury note futures are up 60 ticks and US equity futures are modestly negative.