Yen Falls On Japan Prime Minister Abe's Comments
July 26 2016 - 10:52PM
RTTF2
The Japanese yen weakened against the other major currencies in
the Asian session on Wednesday, after the Japanese Prime Minister
Shinzo Abe said that the government would compile an economic
stimulus package.
While speaking in the southern city of Fukuoka, Abe said that he
will announce an economic stimulus package worth 27 trillion yen
($254 billion), as an effort to revive the economy.
Meanwhile, the Bank of Japan begins its two-day policy meeting
Thursday. Economists expect further monetary stimulus from the
central bank.
Also, the Asian stock markets are mostly higher, with the
Japanese market staging a rebound following three straight days of
losses. However, gains are modest in most markets as investors
treaded cautiously ahead of the U.S. Federal Reserve's interest
rate decision later in the day.
The Federal Reserve is widely expected to leave interest rates
unchanged at the end of its two-day policy meeting today, although
investors will look closely at the statement that will accompany
the Fed decision, searching for clues as to when the central bank
will hike interest rates.
Tuesday, the yen rose 1.16 percent against the euro, 1.18
percent against the pound, 1.02 percent against the U.S. dollar and
1.77 percent against the Swiss franc.
In the Asian trading, the yen fell to a 6-day low of 74.71
against the NZ dollar and a 5-day low of 117.14 against the euro,
from yesterday's closing quotes of 73.78 and 114.95, respectively.
If the yen extends its downtrend, it is likely to find support
around 77.00 against the kiwi and 123.00 against the euro.
Against the pound and the U.S. dollar, the yen dropped to 2-day
lows of 139.90 and 106.54 from yesterday's closing quotes of 137.31
and 104.62, respectively. The yen may test support near 162.00
against the pound and 108.00 against the greenback.
Against the Australian and the Canadian dollars, the yen slipped
to 2-day lows of 79.57 and 80.77 from yesterday's closing quotes of
78.46 and 79.31, respectively. The yen is likely to find support
near 82.00 against the aussie and 83.00 against the loonie.
The yen edged down to 107.37 against the Swiss franc, from
yesterday's closing value of 105.39. On the downside, 112.00 is
seen as the next support level for the yen.
Looking ahead, Eurozone M3 money supply data for June, the first
estimate U.K. GDP data for the second quarter are due to be
released later in the day.
In the New York session, U.S. durable goods orders and pending
home sales data, both for June, are slated for release.
At 2:00 pm ET, the Federal Reserve will announce its decision on
monetary policy. The Fed is expected to keep the Federal Funds Rate
unchanged at 0.25-0.50 percent.
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