Yen Climbs Amid Risk Aversion
17 January 2017 - 4:09PM
RTTF2
The Japanese yen strengthened against its most major rivals in
the early European session on Tuesday amid risk aversion, as
investors adopted a cautious stance ahead of the U.K. Prime
Minister Theresa May's speech, which is expected to outline a
"hard" exit from the European Union.
Investors became wary over reports that the U.K. PM is likely to
prefer a clean break from the EU, quitting from its single market
for goods and services and forge a completely new trading
relationship with the bloc.
"Not partial membership of the European Union, associate
membership of the European Union, or anything that leaves us
half-in, half-out," May is set to say, according to excerpts
released by her office.
Further dampening investor mood was growing uncertainty over
U.S. policy ahead of President-elect Donald Trump's inauguration
later this week.
Final figures from the Ministry of Economy, Trade and Industry
showed that Japan's industrial production increased as initially
estimated in November.
Industrial production rose a seasonally adjusted 1.5 percent
month-over-month in November, after remaining flat in the previous
month. That was in line with the flash data published on December
27.
The currency has been trading in a positive territory in the
previous session.
The yen climbed to 113.26 against the greenback, its strongest
since December 8, while approaching nearly 3-month high of 86.40
against the loonie. The yen is likely to challenge resistance
around 110.00 against the greenback and 84.00 against the
loonie.
The yen strengthened to a 1-1/2-month high of 120.67 against the
euro and near a 6-week high of 112.47 against the Swiss franc,
compared to Monday's closing values of 121.01 and 112.77,
respectively. If the yen extends rise, it may find resistance
around 118.00 against the euro and 111.00 against the franc.
On the flip side, the yen dropped to 137.83 against the pound,
from a high of 137.06 hit at 4:00 am ET. The next possible support
for the yen may be found around the 138.00 mark.
Looking ahead, European Central Bank Governing Council Member
Ewald Nowotny takes part in a panel discussion on "euro reforms in
turbulent times" in Vienna at 6:00 am ET.
In the New York session, U.S. Empire State manufacturing index
for January is slated for release.
At 8:45 am ET, Federal Reserve Bank of New York President
William Dudley is expected to speak about consumer behavior at the
National Retail Federation Convention and Expo, in New York.
At 10:00 am ET, Federal Reserve Board Governor Lael Brainard is
expected to speak on monetary and fiscal policy before the
Brookings Institution, in Washington, U.S.
Subsequently, Federal Reserve Bank of San Francisco President
John Williams is expected to speak before the Sacramento Business
Review Economic Forecast event, in Sacramento, U.S.
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