News Column

Yen Falls Against Majors

June 16, 2014

OTTAWA (Alliance News) - The Japanese yen drifted lower against its major rivals in Asian deals on Tuesday, as investor sentiment improved after Japanese Prime Minister Shinzo Abe introduced new policy measures to improve Japan's growth prospects, which plans to cut corporate income taxes and revamp the Government Pension Investment Fund.

The draft presented to Industrial Competitiveness Council on Monday calls for lowering of Japan's 35% corporate income tax rate to below 30% within a few years from fiscal 2015. As per the newest components of Abe's "third arrow" of reforms, the government proposes to ease regulations in the agriculture, employment and health-care areas.

According to the proposal, the government plans to revise the portfolio of Government Pension Investment Fund that is dominated by Japanese government bonds.

The growth plan, "Strategy for Reviving Japan," are set to be approved as formal government policy at a cabinet meeting in late June.

The yen fell to 4-day lows of 138.45 against the euro, 113.64 against the franc and 94.02 against the loonie, compared to yesterday's closing quotes of 138.17, 113.47 and 93.85,respectively. If the yen extends decline, it may find support around 139.5 against the euro, 114.00 against the franc and 94.7 against the loonie.

The yen dropped to 173.13 against the pound and 102.06 against the greenback, compared to yesterday's closing values of 172.88 and 101.82, respectively. On the downside, the yen may find support around 102.5 against the greenback and 174.00 against the pound.

At 1:45 am ET, Swiss SECO economic forecasts are due.

Swiss producer and import prices, UK CPI and PPI - all for May, DCLG house prices for April and German ZEW economic sentiment index for June are set for release in the European session.

From the US, CPI, housing starts and building permits - all for May are scheduled for release in the New York session.

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Source: Alliance News

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