Yen Rises After BoJ Kuroda Comments
September 26 2016 - 2:00AM
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The Japanese yen strengthened against other major currencies in
the early European session on Monday, after a speech by Bank of
Japan Governor Haruhiko Kuroda saying that the bank is willing to
use every possible tool, if necessary, to achieve its price
stability objective.
Speaking to the business leaders in Osaka, the BoJ Governor
Kuroda said that there is no better opportunity than now to
completely get out of deflation. Just talking about a limit to
monetary policy does not help at all, said Kuroda.
The BoJ last week modified its policy framework, giving thrust
to the yield curve as it still struggles to achieve the inflation
target.
Meanwhile, market attention turned from central bank meetings to
U.S. politics ahead of tonight's crucial debate between Hillary
Clinton and Donald Trump. The first of the three presidential
debates can have a significant effect on presidential election
polling.
A Washington Post-ABC News poll has Democratic presidential
nominee Hillary leading Republican candidate Trump by 2 points on
the eve of the debate.
In other economic news, data from the Cabinet Office showed that
the leading index for Japan fell to 100.0 in July from 100.6 in
June, which was revised down from 100.7.
The coincident index that reflects the current economic
activity, rose slightly to 112.1 in July from 112.0 in the previous
month. The preliminary reading for the month was 112.8.
In the Asian trading today, the yen held steady against its
major rivals.
In the European trading, the yen rose to nearly a 1-1/2-month
high of 129.88 against the pound, a 5-week high of 72.69 against
the NZ dollar and a 5-day high of 76.20 against the Canadian
dollar, from early lows of 131.23, 73.21 and 76.79, respectively.
If the yen extends its uptrend, it is likely to find resistance
around 128.00 against the pound, 71.00 against the kiwi and 75.00
against the loonie.
Against the U.S. dollar, the Swiss franc and the Australian
dollar, the yen advanced to 4-day highs of 100.51, 103.66 and 76.45
from early lows of 101.08, 104.27 and 76.98, respectively. The yen
may test resistance near 99.00 against the greenback, 101.00
against the franc and 75.00 against the aussie.
The yen edged up to 112.90 against the euro, from an early low
of 113.51. On the upside, 111.00 is seen as the next resistance
level for the yen.
Looking ahead, U.S. new home sales data for August is slated for
release in the New York session.
At 8:30 am ET, European Central Bank's member of the supervisory
board, Ignazio Angeloni, speaks at a conference "Strengths and
Weaknesses of European Banking" organized by Brevan Howard Centre
and Imperial College Business School, in London.
At 9:00 am ET, European Central Bank President Mario Draghi will
testify before the Committee on Economic and Monetary Affairs of
European Parliament, in Brussels.
At 9:30 am ET, Minneapolis Fed President Neel Kashkari
participates in a fireside chat moderated by Harry Melander,
president of the Minnesota Building and Construction Trades Council
and board member of the Federal Reserve Bank of Minneapolis, in
Minneapolis, U.S.
Fifteen minutes later, European Central Bank Vice President
Vitor Constancio is expected to speak at a conference, in
Frankfurt.
At 11:45 am ET, Federal Reserve Governor Daniel Tarullo will
deliver a speech titled "Next Steps in the Evolution of Stress
Testing" at the Yale School of Management Leaders Forum, in New
Haven.
At 12:00 pm ET, Austrian National Bank Governor and ECB
Governing Council member Ewald Nowotny is expected to speak on the
future of banks, in Vienna.
At 1:30 pm ET, Federal Reserve Bank of Dallas President Robert
Kaplan will participate in moderated Q&A before the Independent
Bankers Association of Texas Annual Convention in Dan Antonio.
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