USD/JPY is thrown around on interpretations of Ukraine's Feb 16 Russian invasion

USD/JPY is back on the bid following a series of information that is crossing the wires with regards to the prospects of a Russian invasion. In recent trade, the President of Ukraine Volodymyr Zelensky was reported to have said that the Ukraine “has been informed” that Wednesday, February 16 “will be the day of the attack”. This sent the yen higher and financial markets into risk-off mode again:

• Markets flip risk-off as Ukraine's President Zelensky cites 16 Feb. as day of Russia attack

However, as the chart illustrates above, the price turned on a dime when a senior Ukrainian official denied that President Zelensky was being literal when he said in an address to the nation that he'd been told a Russian attack would begin on February 16th. Mykhailo Podoliak, a Presidential adviser,  said that Zelensky was being ironic. Meanwhile, the risk is very real and markets are on high alert and on tenterhooks. The yen stands to benefit from risk aversion, especially through crosses such as AUD/JPY. Traders will be waiting for leaders to meet, with the French president visiting Moscow and the US president meeting with the Zelensky at the White House on Wednesday.

As for other fundamental drivers, the US dollar index reached a two-week high on Monday, as St. Louis Federal Reserve President James Bullard reiterated calls for a faster pace of U.S. Federal Reserve interest rate hikes. Bullard on Monday also said that four strong inflation reports in a row warranted action. Last week's stronger-than-expected US Consumer Price index report has driven speculation the Fed might raise rates by a full 50 basis points in March.