Yen Retreats As Japanese Authorities Warned Of Soaring Currency
The Japanese yen dropped against its major opponents in the
European session on Friday, after Japanese officials warned against
a strengthening currency, saying that they will monitor the forex
market with a sense of urgency.
Japanese Finance Minister Taro Aso cautioned that the yen is
appreciating very quickly, which will impact authorities' struggle
to boost external demand.
"Stability is important, so I'm closely monitoring it with a
sense of urgency," he told after a cabinet meeting.
Officials from Japan's Ministry of Finance, the Bank of Japan
and the Financial Services Agency are holding a meeting to discuss
The yen's rise came against the backdrop of dismal U.S. GDP data
for the second quarter and rising coronavirus cases world wide.
The currency's retreat was also aided by investor optimism over
encouraging earnings updates from U.S. technology giants Amazon,
Apple, Alphabet and Facebook.
In economic news, industrial production in Japan rose a
seasonally adjusted 2.7 percent on month in June, beating forecasts
for a gain of 1.2 percent following the 8.9 percent decline in
The unemployment rate in Japan came in at a seasonally adjusted
2.8 percent in June, beating forecasts for 3.1 percent and down
from 2.9 percent in May. The job-to-applicant ration fell to 1.11,
missing expectations for 1.16 and down from 1.2 in the previous
The yen pulled back to 104.86 against the greenback, from a
3-1/2-month high of 104.19 seen at 10:30 pm ET. The yen is seen
finding support around the 108.00 region.
The yen weakened to 137.58 against the pound, its lowest level
since June 9. The next possible support for the yen is seen around
the 141.00 level.
Survey data from the Nationwide Building Society showed that UK
house prices unexpectedly rose in July as activity picked up after
the lockdown restrictions to battle the coronavirus pandemic were
The house price index rose 1.5 percent year-on-year after a 0.1
percent fall in June. Economists had forecast a 0.3 percent
The yen dropped to 115.43 against the franc, representing a
1-week low. If the yen slides further, it may find support around
the 118.00 level.
The yen eased to 78.10 against the loonie, from more than a
2-month high of 77.61 set at 12:00 am ET. On the downside, 80.00 is
possibly seen as the next support level for the yen.
After rising to 75.01 at 11:05 pm ET, the yen retreated to 75.42
against the aussie. The yen is likely test support around the 78.00
The yen fell back to 124.26 against the euro, not far from near
a 2-month low of 124.31 hit in the Asian session. The yen is poised
to find support around the 126.00 mark.
Flash estimate from Eurostat showed that the euro area economy
contracted at the fastest pace on record in the second quarter amid
the coronavirus pandemic.
Gross domestic product fell 12.1 percent on a quarterly basis,
bigger than the 3.6 percent drop in the first quarter. This was
bigger than the economists' forecast of 11.2 percent and was the
sharpest decline seen since the series began in 1995.
The yen showed a modest pullback against the kiwi, touching
70.9. Should the yen slides further, 72.00 is found as its next
Looking ahead, Canada GDP data for May and industrial product
price index for June, U.S. personal income and spending data for
the same month and University of Michigan's final consumer
sentiment index for July will be featured in the New York
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