Yen Climbs Amid Risk Aversion
06 February 2018 - 1:39PM
RTTF2
The Japanese yen strengthened against its major counterparts in
Asian deals on Tuesday amid risk aversion, as Asian shares fell
following a sharp decline in Wall Street overnight, as investors
continued to worry about rising bond yields and potentially higher
interest rates.
The benchmark S&P 500 as well as the Dow Jones Industrial
Average suffered their biggest percentage drops since 2011 and
erased all of their gains for 2018.
The sell-off began after a solid US jobs report triggered hopes
that that the Federal Reserve will raise interest rates faster than
expected.
The day's economic calendar remains light, with U.S. trade data
due later in the day.
Speaking to Parliament, the Bank of Japan Governor Haruhiko
Kuroda said that the stock market moves were due to various
factors, but the Japanese, U.S. and European economies were in
"very good shape."
"The recovery is broadening across sectors and the outlook
remains good as a trend," Kuroda told.
The yen climbed to near 4-week highs of 133.98 against the euro
and 151.21 against the pound, off its early lows of 135.29 and
152.62, respectively. The next possible resistance for the yen is
seen around 132.00 against the euro and 151.00 against the
pound.
The yen advanced to a weekly high of 108.46 against the
greenback and a 6-day high of 116.35 against the franc, from its
previous lows of 109.30 and 117.30, respectively. If the yen rises
further, it may target resistance around 106.00 against the
greenback and 114.00 against the franc.
The yen reversed from its early lows of 86.21 against the aussie
and 87.22 against the loonie, rising to near a 2-month high of
84.99 and more than a 5-month high of 86.35, respectively. The yen
is seen finding resistance around 83.00 against the aussie and
85.00 against the loonie.
Looking ahead, German construction PMI for January and retail
PMI reports from major European economies are set for release in
the European session.
In the New York session, U.S. and Canadian trade data for
December and Canada Ivey PMI for January will be out.
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