Yen Climbs As Sentiment Fades On Fed, China Worries
August 30 2015 - 11:55PM
RTTF2
The Japanese yen gained ground against its major rivals on
Monday, as lingering worries over China's growth and the prospects
of a rate increase by the Federal Reserve raised the demand for
safe-haven assets.
China will release tomorrow official PMI for August and
investors wait to see if the world's second largest economy is
heading for a hard landing.
At the annual gathering in Jackson Hole, Wyoming, the Fed
officials left the door open for an interest rate hike in
September, despite the recent turmoil in global markets.
In an interview with CNBC, Federal Reserve Vice Chairman Stanley
Fischer said Friday that it was too early to tell if the Fed will
raise interest rates in September, but noted that the central bank
is heading in the direction of raising rates. Contraction in
Japan's industrial output in July, also dampened risk
sentiment.
Data from the Ministry of Economy, Trade and Industry showed
that industrial production in Japan fell a seasonally adjusted 0.6
percent on month in July.
That missed expectations for an increase of 0.1 percent
following the 1.1 percent increase in June.
The currency showed mixed performance on Friday. While the yen
held steady against the euro and the pound, it declined against the
greenback and the franc.
The yen climbed to 120.88 against the greenback, 186.49 against
the pound and 125.93 against the franc, reversing from an early low
of 121.70, 5-day lows of 187.49 and 126.53, respectively. The yen
is likely to challenge resistance around 119.00 against the
greenback, 185.00 against the pound and 124.00 against the
franc.
The yen hit a 4-day high of 135.86 against the euro, coming off
from its prior 4-day low of 136.35. At Friday's close, the pair was
valued at 136.14. On the upside, the yen is likely to find
resistance around the 134.00 level.
The yen firmed to a 4-day high of 91.30 against the loonie, off
its previous 4-day low of 92.06. Further gains may take the yen to
a resistance around the 89.5 mark.
The Japanese yen reached as high as 86.34 against the aussie,
and held steady thereafter. This may be compared to an early low of
87.29. The yen is seen finding resistance around the 84.00
area.
Looking ahead, Eurozone flash consumer sentiment index for
August is due shortly.
At 9:45 am ET, Chicago PMI for August is to be published.
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