USD/JPY: Yen to strenghten as geopolitical concerns heighten – Rabobank

USD/JPY has dropped sharply over the past two sessions. The Japanese yen has previously proved to be more sensitive to regional geopolitical concerns, therefore, it is expected to strengthen as there is a strong chance that the newsflow regarding tensions with China could increase with frequency in the coming years, as reported by Rabobank.

Geopolitical concerns heightened by news regarding Afghanistan

“Below the psychologically important 109.00 level, the August low near 108.72 is likely to lend support.”
“For the markets, one of the implications of US foreign policy decisions with respect to Afghanistan is that fears regarding the might of China could also increase. This could be reflected in a stronger medium-term position for the JPY than otherwise would be the case.”