Yen Strengthens On Global Trade Worries
June 02 2019 - 11:13PM
RTTF2
The Japanese yen climbed against its most major counterparts in
the Asian session on Monday amid rising risk aversion, as
escalating global trade tensions and U.S. President Donald Trump's
decision to impose tariffs against Mexico sparked fears about
recession across the globe.
Global growth worries flared up amid an escalation in U.S.-China
trade conflict and after the U.S. announced a 5% tariff on Mexican
goods imported into the U.S. and stated that the rate will increase
gradually if Mexico does not make efforts to stop illegal
immigration of people into the U.S.
Crude oil prices also fell, as global growth worries weakened
the demand outlook.
The latest survey from Nikkei showed that Japan manufacturing
sector fell into contraction in May, with a manufacturing PMI score
of 49.8.
That's down from 50.2 in April, and it slips beneath the
boom-or-bust line of 50 that separates expansion from
contraction.
The yen climbed to 108.07 against the greenback, its strongest
since January 15. The next possible resistance for the yen is seen
around the 106.00 level.
The Japanese yen that closed Friday's trading at 120.93 against
the euro spiked up to a 5-month high of 120.78. If the yen rallies
further, 118.00 is likely seen as its next resistance level.
The yen advanced to a 5-month high of 136.62 against the pound,
compared to last week's closing value of 136.77. The yen is seen
finding resistance around the 133.00 region.
On the flip side, the yen edged down to 108.51 against the
franc, from a high of 108.04 hit at 5:30 pm ET. Next key support
for the yen is seen around the 111.00 level.
The yen was trading at 80.26 against the loonie, 75.24 against
the aussie and 70.90 against the kiwi, down from early 5-month
highs of 79.97, 74.97 and 70.66, respectively. On the downside,
82.00, 77.5 and 73.00 are possibly seen as the next support levels
for the yen against the loonie, the aussie and the kiwi,
respectively.
Looking ahead, PMIs from major European economies are due in the
European session.
In the New York session, U.S. ISM manufacturing index for May
and construction spending for April are scheduled for release.
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