News Column

Yen Falls On Risk Appetite

August 29, 2014

CANBERA (Alliance News) - The Japanese yen slipped against the other major currencies in European deals on Friday, as traders sold safe-haven assets amid a rebound in European stocks, though geopolitical tensions still weighed.

The European markets rose after reports showed that the Eurozone inflation fell in August and unemployment rate remained near record levels in July, building hopes that the European Central Bank may ease its monetary policy further to ward off deflation.

At an emergency session of the U.N. Security Council, Western powers expressed outrage over Russian invasion in eastern Ukrainian city of Novoazovsk. The US President Barack Obama ruled out a military confrontation with Russia but said that they would incur "more costs and consequences" for its role in the escalation of crisis.

In economic news, Japan's core consumer prices rose 3.3% on year in July, the Ministry of Internal Affairs and Communications said - matching forecasts and unchanged from June.

Overall consumer prices were up 3.4% on year - also in line with expectations and easing from 3.6%.

The unemployment rate in Japan was a seasonally adjusted 3.8% in July, the Ministry of Internal Affairs and Communications said.

That missed expectations for 3.7%, which would have been unchanged from the June reading.

The yen fell to a 2-day low of 103.98 against the greenback and a 4-day low of 113.74 against the Swiss franc, off early highs of 103.65 and 113.25, respectively. The yen may possibly find support around 104.5 against the greenback and 114.5 against the franc.

The yen edged down to 137.18 against the euro and 87.18 against the NZ dollar, after having advanced to 136.57 and a 2-day high of 86.67,respectively in prior deals. The yen is likely to seek support around 138.00 against the euro and 88.00 against the kiwi.

The yen slipped to 2-day lows of 172.52 against the pound and 95.87 against the loonie, from early highs of 171.93 and 95.46, respectively. Further weakness may take the yen to support levels of around 173.4 against the pound and 96.5 against the loonie.

The Japanese currency held steady against the aussie, after falling to 97.19 a short while ago. This may be compared to an early high of 96.92. If the yen continues slide, 98.00 is possibly seen as its next support level.

Looking ahead, Canada GDP data for June, US personal income and spending data for July and Reuters/University of Michigan's final consumer sentiment index for August are set for release in the New York session.

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Source: Alliance News

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