The japanese yen appreciated against the u.s. dollar on Monday as geopolitical tensions building in the Middle East after attacks on plants saudi arabian oil have disrupted the oil supply of the planet.
The pair USD/JPY has dropped 0.3% to 107,80 at 11: 00 am.
The drone strikes have attacked Saturday an installation of oil processing at Abqaiq, the largest in the world, and the field’s oil-rich neighbor of Khurais, and reduces by 5% the world’s supply of oil.
The group Houthi-aligned by Iran in Yemen has claimed responsibility for the damage, but the us secretary of State Mike Pompeo has pointed the finger directly to Iran, saying over the weekend that Iran had launched “an unprecedented attack on the world’s energy supply”.
The news has intensified tensions in the Middle East, driving up the yen, drawing some safe-haven demand.
At the same time, the u.s. dollar recorded a slight decrease in the face of declining interest rates expected from the federal Reserve on Wednesday.
The dollar index, which tracks the greenback against a basket of other currencies, slipped 0.1% to 97,732. The data released on Friday showed that u.s. retail sales rose more than expected in August. This comes after data from inflation better than expected producer prices on Wednesday and consumer prices Thursday.
The Bank of Japan must also meet this week. Some think that the central bank could push interest rates further into negative territory and put in place policies stimulating.
The development of trade between the United States and China also remained in the spotlight while us officials and chinese will come together this week in anticipation of the scheduled talks between the main trade negotiators in October.
The tensions between the two sides have eased somewhat in recent weeks, after Beijing has exempted certain agricultural products customs duties on american products last week and that the american president Donald Trump has delayed of 15 days, the price increase of several chinese products.