Posts Tagged ‘Korean conflict’

USDJPY Parabolic After North Korean Aggression in South Korea

In Forex Market on November 23, 2010 at 2:13 pm

So we’ve covered the fallout form the Korean conflict in the currency market for the KRW, but how about their neighbors? USDJPY is a good anchor for stability in the overall Far Eastern region. We saw a major selloff in the Yen right when the North Korean attack hit the wires. But how have we faired since then?

Below is the chart for USDJPY for the hours after the artillery shelling by the North Koreans:

USDJPY as the anchor of Far Eastern stability, has cooled down in the aftermath of the Korean conflict

It seems that the conflict is over. The South Koreans have already said that as a responsible major G20 economy they can not contribute to more instability by escalating this thing (Reuters). Also at the Reuters link you can see the North Korean take on what went down:

North Korea said its wealthy neighbor started the fight.

“Despite our repeated warnings, South Korea fired dozens of shells from 1 p.m. … and we’ve taken strong military action immediately,” its KCNA news agency said in a brief statement.

Regardless of how this little spat went down, it looks like the worst is over , at least in terms of the economic effects.  USDJPY has returned to the pre-conflict levels and the market seems to have shrugged off any lasting volatility in the region.