Yen Drops On Stimulus Bets
The Japanese yen slipped against its major counterparts in early
European deals on Monday, as investors hope for policy responses
from the U.S Federal Reserve to the Bank of Japan and the Reserve
Bank of Australia to weather the damaging economic impact of the
The U.S. Federal Reserve is expected to cut interest rates when
it meets on March 18.
The Reserve Bank of Australia holds its second meeting of the
year on Tuesday and the central bank is all-but certain to cut
interest rates. Economists expect New Zealand's Reserve Bank to
follow suit at its next meeting later this month.
Investors are expecting Beijing to loosen the purse strings
after both official and private surveys showed China's factory
activity collapsing to its worst levels on record.
In a rare emergency statement, Bank of Japan Governor Haruhiko
Kuroda said the central bank would take necessary steps to help
protect markets the impact of the coronavirus.
"The Bank of Japan will closely monitor future developments, and
will strive to provide ample liquidity and ensure stability in
financial markets through appropriate market operations and asset
purchases," Kuroda said in a statement.
The yen fell to 120.25 against the euro and 112.56 against the
franc, from its prior highs of 118.61 and 111.35, respectively. The
next possible support for the yen is seen around 122.00 against the
euro and 114.00 against the franc.
The yen reached as low as 108.58 against the greenback and
139.18 against the pound, off its early near a 5-month high of
107.36 and a 4-1/2-month high of 137.30, respectively. The yen may
locate support around 111.00 against the greenback and 142.5
against the pound.
The yen depreciated to 71.20 against the aussie, 81.39 against
the loonie and 67.79 against the kiwi, reversing from its early
high of 69.41, more than 5-month highs of 79.86 and 66.58,
respectively. If the yen slides further, 74.5, 83.5 and 70.00 are
likely seen as its next support levels against the aussie, the
loonie and the kiwi, respectively.
Looking ahead, U.K. mortgage approvals for January and final
factory PMI for February are due shortly.
U.S. ISM manufacturing index for February and construction
spending for January are set for release in the New York
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