Japanese Yen Lower As Fed Rate Concerns Ease
The Japanese yen slipped against its major counterparts in the
Asian session on Thursday, as comments from Federal Reserve
Chairman Jerome Powell helped soothe concerns over an aggressive
half-point rate hike this month.
In his Congressional testimony, Powell said that it would be
appropriate to raise the target range for the federal funds rate at
the meeting later this month on the back of high inflation and a
strong labor market.
Powell cautioned that "the near-term effects on the U.S. economy
of the invasion of Ukraine, the ongoing war, the sanctions, and of
events to come," remained highly uncertain.
The Fed would need to be nimble in responding to incoming data
and the evolving outlook.
Asian markets are mostly higher, tracking overnight gains on
Wall Street, amid indications of a gradual tightening of monetary
policy due to the uncertain economic outlook.
The yen weakened to a 6-day low of 155.15 against the pound and
near a 2-month low of 125.83 against the franc, down from its early
highs of 154.64 and 125.40, respectively. The next possible support
for the yen is seen around 157.00 against the pound and 129.00
against the franc.
The yen depreciated to a 3-day low of 115.72 against the
greenback and near a 4-month low of 84.74 against the aussie, after
rising to 115.44 and 84.12, respectively in early deals. Should the
yen falls further, 119.00 and 86.00 may be seen as its next support
levels against the greenback and the aussie, respectively.
Pulling back from its previous highs of 78.17 against the kiwi
and 91.32 against the loonie, the yen dropped to near a 2-month low
of 78.58 and a 1-1/2-month low of 91.79, respectively. The yen is
seen finding support around 80.00 against the kiwi and 94.5 against
In contrast, the yen held steady against the euro, after a rise
to 128.21 at 9:05 pm ET. The pair had ended Wednesday's trading at
Looking ahead, PMI reports from major European economies,
Eurozone jobless rate and PPI for January are due in the European
U.S. weekly jobless claims for the week ended February 26, ISM
non-manufacturing PMI for February and factory orders for January
will be released in the New York session.
At 7.30 am ET, the European Central Bank releases the accounts
of the monetary policy meeting of the governing council held on
February 2 and 3.
At 10 am ET, Federal Reserve Chair Jerome Powell will testify on
the semi-annual monetary policy report before the Senate Banking
Committee in Washington DC.
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