Japanese Yen Higher Amid Heightened Virus Fears
06 March 2020 - 2:11PM
RTTF2
The Japanese yen strengthened against its major counterparts in
the Asian session on Friday amid risk aversion, as the spread of a
new Coronavirus stoked fears of a prolonged world economic
slowdown.
More than 95,000 people have been infected and over 3,200 have
died as the flu-like virus spread to nearly 80 countries.
Asian markets fell amid growing threats to the outlook for
economic growth and corporate profits as the spread of coronavirus
accelerated in Europe, Britain and North America.
The coronavirus outbreak will cut global growth by 0.1 percent
to 0.4 percent and it will have a significant impact on developing
Asian economies through weak domestic demand, tourism, trade and
production linkages and supply disruptions, the Asian Development
Bank said.
Data from the Ministry of Internal Affairs and Communications
showed that Japan household spending fell 3.9 percent on year in
January - coming in at 287,173 yen.
That was in line with expectations following the 4.8 percent
decline in December.
The yen rose to 4-day highs of 69.71 against the aussie, 66.63
against the kiwi and 118.81 against the euro, from its early lows
of 70.43, 67.18 and 119.31, respectively. The yen is seen finding
resistance around 67.00 against the aussie, 65.00 against the kiwi
and 116.00 against the euro.
The yen advanced to a 3-day high of 137.03 against the pound,
more than 6-month highs of 78.85 against the loonie and 105.76
against the greenback, off its early lows of 137.74, 79.41 and
106.34, respectively. If the yen strengthens further, it is likely
to test resistance around 133.00 against the pound, 76.5 against
the loonie and 104.00 against the greenback.
Reversing from an early low of 112.38 against the franc, the yen
edged higher to 111.98. The yen is poised to challenge resistance
around the 108.00 mark.
The Australian dollar was weighed by fall in Asian stocks.
Data from the Australian Bureau of Statistics showed that
Australia retail sales fell a seasonally adjusted 0.3 percent on
month in January - coming in at A$27.632 billion.
That missed forecasts for a flat reading following the
downwardly revised 0.7 percent decline in December (originally 0.5
percent).
The aussie fell to a 2-day low of 0.8827 against the loonie,
3-day lows of 1.7062 against the euro and 1.0442 against the kiwi,
pulling away from its early highs of 0.8873, 1.6933 and 1.0501,
respectively. The next possible support for the aussie is seen
around 0.86 against the loonie, 1.73 against the euro and 1.025
against the kiwi.
The aussie declined to 0.6585 against the greenback, from an
early high of 0.6624. Next key support for the aussie is likely
seen around the 0.63 level.
Looking ahead, U.S. and Canadian trade data for January and jobs
report for February, Canada Ivey PMI for February, U.S. consumer
credit and wholesale sales for January will be out in the New York
session.
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