Yen Trades Higher Amid Risk Aversion On Oil Weakness
June 22 2017 - 2:16AM
RTTF2
The Japanese yen traded higher against its major counterparts in
early European deals on Thursday amid risk aversion, as falling oil
prices sparked concerns about the future pace of inflation and
global growth.
Crude oil fell to $42 per barrel on lingering worries over
growing production from Libya, Nigeria and the US, which undermines
the effectiveness of the OPEC-led output cuts to rein in a
three-year glut.
Investors await a two-day meeting of the European Council that
kicks off in Brussels later today, with issues such as terrorism
and climate change likely to he high on the agenda.
British Prime Minister Theresa May is expected to make her offer
at the event over the status of European Union citizens living in
the U.K.
Speaking to business leaders in Aomori, the Bank of Japan Deputy
Governor Kikuo Iwata said that there is still a long way to go
before achieving the inflation target of 2 percent.
Further, risks have continued to be skewed to the downside,
particularly those regarding developments in overseas economies and
Japan's inflation expectations.
The currency has been trading in a positive territory in the
Asian session.
The yen rose back to 140.67 against the pound, compared to
Wednesday's closing value of 141.13. The next possible resistance
for the yen is seen around the 138.00 region.
Having fallen to 124.43 against the euro at 6:00 pm ET, the yen
reversed direction and climbed to 123.84. If the yen extends rise,
122.00 is likely seen as its next resistance level.
Reversing from an early low of 114.57 against the Swiss franc,
the yen ticked up to 114.04. Continuation of the yen's uptrend may
see it challenging resistance around the 113.00 level.
Figures from the Federal Customs Administration showed that
Switzerland's foreign trade surplus increased in May, as exports
grew faster than imports.
The trade surplus climbed to CHF 3.4 billion in May from CHF 1.9
billion in April. In March, the surplus was EUR 3.0 billion.
The yen strengthened to weekly highs of 83.73 against the aussie
and 83.21 against the loonie and held steady thereafter. The yen is
seen finding resistance around the 82.00 mark against both the
aussie and the loonie.
The yen firmed to a 3-day high of 110.95 against the greenback
in the Asian session and remained higher in remaining part of
deals. Further uptrend may see the yen challenging resistance
around the 109.00 area.
Looking ahead, U.S. weekly jobless claims for the week ended
June 17, FHFA's house price index for April and leading indicators
for May, as well as Canada retail sales for April are set for
release in the New York session.
At 10:00 am ET, Eurozone flash consumer confidence index for
June is due.
At the same time, Federal Reserve Governor Jerome Powel speaks
about economic growth before the US Senate Committee on Banking,
Housing, and Urban Affairs in Washington DC.
Swiss National Bank board member Andrea Maechler speaks in
Zurich at 12:00 pm ET.
The Bank of England external MPC Member Kristin Forbes speaks at
the London Business School at 2:00 pm ET.
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