News Column

Yen Retreats After Kuroda's Comments

May 15, 2014



CANBERA (Alliance News) - The yen retreated from early highs against the other major currencies ahead of European deals on Thursday after the Bank of Japan Governor Haruhiko Kuroda's speech at the Annual Tokyo Conference.

In the speech about Restoring the Japanese Economy,Kuroda said that a correction in the appreciation of the yen might slow the pace of the relocation of production overseas in the future, given that there is a considerable lag between the decision to relocate production and the actual start of production overseas.

The central bank will continue its Quantitative and Qualitative Easing to achieve its 2% price stability target within a time horizon of about 2 years, Kuroda told.

Meanwhile, the Japanese consumer confidence index April rose 37.0, up from 37.5 in the previous month. Economists were looking for a reading of 36.7.

Japan's gross domestic product jumped 5.9% on year in the first quarter of 2014, the Cabinet Office said in today's preliminary reading.That was well above forecasts for an increase of 4.2% following the 0.7% gain in the previous three months.

On a quarterly basis, GDP was up 1.5% - also topping expectations for an increase of 1.0% following the 0.2% gain in the fourth quarter.

The yen dropped to a 2-day low of 93.86 against the Canadian dollar, from a high of 93.38 hit in the early Asian session. Yesterday's closing quote of the pair was worth 93.57. The next possible downside target of the yen is seen at 93.98.

The yen eased to 114.63 against the Swiss franc, from an early multi-month high of 114.30. The pair closed yesterday's deals at 114.51. The next possible downside target of the yen is seen at 115.74.

Against the pound, the yen retreated to 170.99, from more than a 4-week high of 170.46 hit in the early Asian session. The next possible downside target of the yen is seen at 172.89.

Against the Australian dollar and the U.S dollar, the yen eased to 95.75 and 101.98, from early 6-day highs of 95.23 and 101.66 hit in the early Asian session. The yen closed yesterday's deals at 95.54 against the Australian dollar and 101.91 against the U.S dollar. If the yen extends its downtrend, it may find support around the 96.33 against the aussie and 102.58 against the greenback.

Against the NZ dollar, the yen eased to 88.64, from a 3-day high of 88.00 hit in the early Asian session. Yesterday's closing value of the kiwi-yen pair was worth 88.32. If the yen extends its downtrend, it is likely to find support around the 89.06 area.

The yen eased to 139.87 against the euro, from an early high of 139.48. The pair closed yesterday's deals at 139.74. The next possible downside target of the yen is seen at 141.05.

Looking ahead, European Central Bank monthly report, Eurozone final CPI for April and first estimate for first quarter GDP are set for release in the European session.

The US CPI and industrial production for April, weekly jobless claims for the week ended May 10 and NAHB housing market index for May and Canadian manufacturing sales and existing home sales report for April are likely to influence trading in the New York session.



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Source: Alliance News


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