Japanese Yen Extends Fall
October 11 2021 - 3:53AM
RTTF2
The Japanese yen extended its decline against its major
opponents in the European session on Monday, amid hopes of a wider
interest rate differential between the United States and Japan.
While the Federal Reserve is planning to scale back its asset
purchases amid a spike in inflation, the Bank of Japan is unlikely
to move toward policy normalization soon.
A rise in U.S. treasury yields is widening the interest gap with
its Japanese counterpart, pushing down the yen.
The yen was further weighed by rising oil prices due to supply
constraints and continued strong demand.
Japanese Prime Minister Fumio Kishida's comments that he would
not raise the country's capital gains tax for the time being
further underpinned sentiment.
The PM reiterated that the government is focusing on pay hikes
before reviewing the capital gains tax.
The yen fell to 113.04 against the greenback, a level unseen
since December 2018. The yen may test support around the 116.00
region, if it falls again.
The yen hit 130.72 versus the euro, its weakest level since
September 3. On the downside, 132.00 is seen as the next likely
support for the yen.
The yen weakened to near a 4-month low of 121.94 versus the
franc and a 3-1/2-month low of 154.22 against the pound, off its
prior highs of 120.83 and 152.64, respectively. The yen is poised
to find support around 124.5 versus the franc and 157.00 against
the pound.
The Japanese currency depreciated to more than a 3-month low of
82.99 against the aussie, near 4-week low of 78.55 against the kiwi
and a fresh 4-month low of 90.76 against the loonie, retreating
from its early highs of 81.85, 77.58 and 89.83, respectively. The
yen is seen finding support around 84.00 against the aussie, 80.00
against the kiwi and 93.00 against the loonie.
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