Japanese Yen Gains on Safe-Haven Demand

North Korea reportedly tested a newly developed intercontinental ballistic missile, capable of carrying a large and heavy nuclear warhead. Washington immediately lodged a protest and called for unified global action to hold Pyongyang and Kim Jong-un accountable for North Korea’s ongoing pursuit of nuclear weapons. The United States has called for an emergency meeting of the United Nation’s Security Council to discuss the looming threat.

A closed-door session of the 15-country forum is expected to occur later during Wednesday’s session. USDJPY was last seen around the 113.200-mark, with further downside possible should the climbing geopolitical risks heighten demand for risk-aversion assets. USDJPY has found resistance around 113.500, a failure to break above this level could see the pair slide all the way to 111.600.

Signalling renewed pressure on the sector after a pickup in May, Chinese services firms grew at a reduced pace in June according to a private business survey released overnight. The Caixin/Markit services PMI fell to 51.6 last month from 52.8 in May, when an unexpected rebound halted four straight months of declines. Subdued demand saw the new business sub-index slip to 51.9 from May's 53.5, hitting its lowest level since May 2016.

The data reinforced analyst views that the world's second-biggest economy was cooling following a strong start to the year, as Beijing clamps down on easy credit to arrest a huge build-up in debt. USDCNH slumped in early Wednesday trade but is off the lows of the session to currently trade around the 6.7955-mark.