The dollar crept higher against the yen on Friday, despite yet another North Korea missile test over Japan into the Pacific Ocean. The greenback withstood heavy selling pressure but recovered over a hundred points and now trades at session highs.
USD/JPY bounced back to 110.70, a recovery from the intraday low of 109.55 set in early Asian trade on Friday when it came under pressure as the yen edged higher following reports of North Korea's missile launch.
North Korea launched another missile on Friday which flew over Japan's northern island of Hokkaido far out into the Pacific Ocean. South Korean and Japanese officials reported, further escalating tensions after Pyongyang's recent test of a powerful nuclear bomb.
Despite Japan's geographical proximity to North Korea, the yen continues to attract safe-haven flows as forex traders rush to the Nipponese currency in times of uncertainty.
The dollar was boosted by robust inflation numbers, which bolstered expectations of further rate hikes by the Fed this year. The U.S. 10-year Treasury yield last stood at 2.181 percent, having risen 12 basis points so far this week.
Cable took a breather, after rallying strongly on Thursday following the Bank of England’s hint that it may raise interest rates for the first time in a decade in the "coming months".
GBP/USD traded at $1.3430 at the time of writing. On Thursday, it broke 1.34 for the first time in a year, and recorded a daily gain of 1.4 percent.
EUR/USD slipped 0.1 percent to 1.1913, staying below a 2-1/2 year high of 1.2092 set last week.
