News Column

Yen Advances Amid Risk Aversion

June 23, 2014

BRUSSELS (Alliance News) - The Japanese yen advanced against its key counterparts in early European deals on Monday, as European stocks fell amid disappointing private sector activity data from France and Germany, as well as on mounting concerns over violence in Iraq.

The flash survey data from Markit Economics showed that French private sector contracted further to 48 in June, a four-month low, and down from 49.3 in May.

Separate data showed that German flash composite output index declined to 54.2 in June from 55.6 in May, which is its slowest pace of growth in eight months.

The US Secretary of State John Kerry reached in Baghdad and will meet Iraq Prime Minister Nouri al-Maliki to help prevent the country from descending into sectarian civil war. His visit comes after ISIS militants took control over more towns across north-Western Iraq over the weekend.

In economic news, an index monitoring the manufacturing sector in Japan came in with a score of 51.1 in May, the latest survey from Markit Economics showed - up from 49.9 in April.

That pushes the index into expansionary territory, as a score above 50 signals growth in a sector while a reading below means contraction.

The yen advanced to 138.27 against the euro, its highest since June 17. At Friday's close, the pair was valued at 138.70. The next possible upside target for the yen is seen around the 137.00 zone.

The yen climbed to a 4-day high of 173.27 against the pound, after falling to a 5-1/2-month low of 174.08 last week. The yen is likely to find resistance around the 172.5 mark.

The yen climbed to a 5-day high of 113.58 against the franc, which may be compared to Friday's closing quote of 113.96. On the upside, 112.5 is seen as the yen's next possible upside target level.

The yen which ended last week's trading at 102.01 against the greenback advanced to 101.81. The yen is likely to test resistance around the 101.00 mark.

Looking ahead, US existing home sales for May and Markit's flash manufacturing PMI for June are set for release in the New York session.

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Source: Alliance News

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