The USD/JPY Continues to Rise for the Second Consecutive Day

The USD/JPY pair defied its typical market correlation, rising in line with the U.S. dollar at the end of the first trading day of the new week. The U.S. dollar continued to benefit from geopolitical tensions in the Middle East, the implications of U.S. employment data, and the anticipation of U.S. consumer price inflation data.

The USD/JPY rose to 151.31 from the previous day’s close of 149.65. The pair fell to its lowest level on Monday at 149.69, before reaching a high of 151.54.

The U.S. dollar ended the previous week on an upward trend, supported by some initial employment indicators and developments in the Middle East, following Syrian opposition forces’ advance, which led to their control of Damascus and the flight of Syrian President Bashar al-Assad from the country.

These events escalated to the point where Russia announced the “resignation” of Syrian President Bashar al-Assad from power and his “departure from Syria” just hours after opposition forces seized the capital. Undoubtedly, these developments served as a wake-up call, sparking a risk-averse sentiment in financial markets due to the anticipation of further developments in Syria.

This is particularly significant given the involvement of numerous regional and international parties in the Syrian crisis, including Hezbollah, which recently signed a ceasefire agreement with Israel, as well as Iran and Russia, Assad’s allies.

The decline in risk appetite due to these tensions led to a modest weekly increase in the U.S. dollar for the week ending December 6.