News Column

Yen Advances As European Stocks Fall

July 4, 2014

CANBERA (Alliance News) - The Japanese yen strengthened against the other major currencies in the early European session on Friday as European stocks fell, after recent rally.

The benchmark France CAC 40 is currently down 7.71 points or 0.17% at 4,482, the German DAX is down 7.05 points or 0.07% at 10,022 and the UK FTSE 100 is down 3.90 points or 0.06% at 6,861.

Investor sentiment rose in the Asian session due to upbeat US jobs data. The Labor Department released a report showing that the US non-farm payroll employment jumped by 288,000 jobs, while employment rate dropped to nearly a 6-year low of 6.1%.

The strong US jobs report raised hopes that the Federal Reserve will raise interest rates sooner rather than later.

In the introductory remarks of post-decision press conference in Frankfurt on Thursday, the European Central bank president Mario Draghi said that euro area interest rates are set to remain low amid low inflation and as the liquidity measures announced last month are expected to boost lending to the real economy. In Ukraine, the country's new defense minister on Thursday pledged to restore the country's territorial integrity by retaking Crimea, which was annexed by Russia in March. The EU, meanwhile, voiced concerns over the continued violence in eastern Ukraine as well as its impact on the security of journalists and freedom of expression in the region.

The yen rose to a 4-day high of 113.96 against the Swiss franc, from an early low of 114.40. The next possible upside target for the yen is seen at the 113.02 level.

Moving away from an early low of 89.44 against the NZ dollar, the yen climbed to a 2-day high of 89.05. If the yen extends its uptrend, it is likely to find resistance around the 88.20 area.

Having fallen to an early low of 139.10 against the euro, the yen firmed to a 2-day high of 138.57. The yen may find resistance near the 137.62 region.

German factory orders declined more than expected in May as both domestic and foreign orders decreased from April. New orders in manufacturing fell by seasonally adjusted 1.7% month-on-month in May, provisional data from Destatis showed Friday. Economists had forecast a 1.1% fall in new orders after rising revised 3.4% in April.

The yen advanced to 174.88 against the pound, 95.80 against the Canadian dollar, 101.96 against the US dollar and 95.37 against the Australian dollar, from early lows of 175.33, 96.10, 102.21 and 95.60, respectively. Continuation of bullish trend may lead the yen to a resistance around 173.57 against the pound, 94.46 against the loonie, 101.15 against the greenback and 94.87 against the aussie.

The US markets are closed for Independence day holiday.

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Source: Alliance News

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