The Japanese yen weakened against the other major currencies in the Asian session on Friday amid rising risk appetite, after the U.S. Federal Reserve ended weeks of speculation by deciding to keep interest rates at record lows on global economic worries. However, gains are muted in most of the markets.
With concerns over global economic headwinds, volatility in stock markets and anemic inflation, the Federal Reserve on Thursday decided against raising interest rates and left its interest rate target unchanged at zero to 0.25 percent. The projections released along with the statement suggest a few Fed members want to delay raising rates into next year, although most still continue to predict a rate hike by the end of 2015.
The currency recouped some of its losses after the release of BoJ minutes but retreated shortly after.
The Bank of Japan’s minutes from the central bank’s meeting on August 6 and 7 showed that the members of the Bank of Japan’s monetary policy board felt that the country’s economic recovery continued. Private consumption was resilient and housing investment was also making progress, the board noted, while inflation expectations appear to be rising.
At the meeting, the BoJ decided to keep its monetary policy unchanged and also maintained its inflation and economic growth outlook. It also held its benchmark lending rate steady at 0 to 0.10 percent.
Thursday, the yen fell against its major rivals. The yen fell 0.59 percent against the euro, 0.58 percent against the pound, 0.21 percent against the U.S. dollar and 0.28 percent against the Swiss franc.
In the Asian trading, the yen fell to nearly a 3-week low of 125.28 against the Swiss franc, from an early high of 124.56. At yesterday’s close, the yen was trading at 124.84 against the franc. The yen may test support near the 127.00 region.
Pulling away from an early 2-day high of 186.22 against the pound, the yen dropped to 187.37. The pair close yesterday’s trading at 186.97. On the downside, 192.00 is seen as the next support level for the yen.
Against the U.S. and the New Zealand dollars, the yen edged down to 120.41 and 76.47 from early 3-day highs of 119.66 and 75.96, respectively. At yesterday’s close, the yen was trading at 119.98 against the greenback and 76.06 against the kiwi. If the yen extends its downtrend, it is likely to find support around 124.00 against the greenback and 79.00 against the kiwi.
The yen edged down to 137.22 against the euro, from an early 2-day high of 85.79. The yen is likely to find support around the 139.00 region.
Against the Australian and the Canadian dollars, the yen slipped to 86.55 and 91.37 from early 2-day highs of 85.79 and 90.79, respectively. At yesterday’s close, the yen was trading at 86.05 against the aussie and 91.03 against the loonie. The next possible downside target for the yen is seen around 91.00 against the aussie and 96.00 against the loonie.
Looking ahead, Eurozone current account data for July is due later in the day.
At 6:00 am ET, Bank of Spain Governor Luis Maria Linde will deliver a speech at the presentation of the book “The Unequal Welfare” in Madrid, Spain.
Subsequently, Bank of England Chief Economist Andy Haldane is expected to speak at the Portadown Chambers of Commerce in Northern Ireland at 7:05 am ET.
In the New York session, Canada CPI and U.S. leading indicators, both for August, are slated for release.
The material has been provided by InstaForex Company – www.instaforex.com