The Japanese yen strengthened against the other major currencies in the Asian session on Wednesday following Bank of Japan Governor Haruhiko Kuroda’s remarks on inflation.
Speaking at an event in Bangkok, Kuroda said that he expects inflation to meet the central bank’s inflation target of 2 percent in the first half of fiscal 2016.
He also brushed off the chances of more quantitative easing.
Meanwhile, Asian stock markets are mostly in negative territory, tracking the weak lead from Wall Street overnight and as investors resorted to profit taking following recent strong gains.
In Greece, the Hellenic parliament is preparing for another vote on the final bailout negotiations on Wednesday as Prime Minister Alexis Tsipras seeks to close the third bailout deal that will offer up to EUR 86 billion debt, after Greece repaid money due to the International Monetary Fund and the European Central Bank.
The Greek government expects the final bailout deal by August 20, which is the deadline for a EUR 3.6 billion debt due to the ECB ahead of the EUR 1.5 billion due to IMF in September.
In other economic news, data from the Ministry of Economy, Trade and Industry showed that Japan’s all industry activity index fell 0.5 percent month-over-month in May, in contrast to April’s 0.1 percent slight increase. Economists had expected a 0.6 percent decrease for the month.
On an annual basis, the all industry activity index declined 0.4 percent in May, reversing a 1.4 percent rise in April, which was revised up from a 1.3 percent increase.
Tuesday, the yen showed mixed trading against its major rivals. While the yen rose against the pound and the U.S. dollar, it fell against the euro and the Swiss franc.
In the Asian trading now, the yen rose to a 1-week high of 123.61 against the U.S. dollar, a 5-day high of 95.37 against the Canadian dollar and a 2-day high of 91.19 against the Australian dollar, from yesterday’s closing quotes of 123.87, 95.64 and 192.65, respectively. If the yen extends its uptrend, it is likely to find resistance around 120.00 against the greenback, 93.00 against the loonie and 88.00 against the aussie.
The yen climbed to an 8-day high of 192.29 against the pound, from yesterday’s closing value of 192.65. On the upside, 186.00 is seen as the next resistance level for the yen.
Moving away from early lows of 135.61 against the euro and 129.33 against the Swiss franc, the yen advanced to 135.10 and 128.97, respectively. The yen may test resistance near 133.00 against the euro and 127.00 against the franc.
Against the NZ dollar, the yen edged up to 81.68 from an early low of 82.18. The next possible upside target for the yen lies around the 80.00 level.
Looking ahead, the Bank of England will publish the minutes of its July monetary policy committee meeting.
In the New York session, U.S. house price index for May and existing home sales data for June are slated for release.
The material has been provided by InstaForex Company – www.instaforex.com