Yen Climbs To Fresh 5-week High Against Euro

Yen Climbs To Fresh 5-week High Against Euro


The Japanese yen rallied across the board on Wednesday morning in Asia as a fall in domestic equities boosted safe-haven buying.
The yen typically strengthens in times of stock market decline as its safe haven status makes the currency more attractive to investors.
The Japanese stock market is trading lower with the overnight weak close on Wall Street, ahead of the Bank of Japan's policy meeting scheduled to start later in the day.
Equities are down on market speculation that the Bank of Japan would further postpone the stimulus measures at today's policy meeting. No policy change is expected this time.
The benchmark Nikkei 225 index is trading at 8,810, down 47.7 points or 0.5 percent from its previous close.
On the data front, an index measuring tertiary industry activity in Japan was up a seasonally adjusted 0.7 percent on month in May, well above forecasts for an increase of 0.2 percent, following the 0.3 percent contraction in April.
Meanwhile, the domestic corporate goods price index was down 0.6 percent on month, below expectations for a decline of 0.4 percent, following the downwardly revised 0.5 percent fall in May.
On a yearly basis, prices were down 1.3 percent versus forecasts for a decline of 1.0 percent, after the downwardly revised 0.7 percent contraction in May.
The yen rose to 5-week highs of 97.12 against the euro and 80.88 against the Swiss franc in early Wednesday Asian deals, compared to Tuesday's late New York session closing values of 97.25 and 80.99, respectively.
Although the yen attempted to stage a pullback shortly, the yen bulls continued to win over the bears. On the upside, the Japanese currency may find target levels at 96.80 against the common currency and 80.60 against the Switzerland unit.
The euro is still under selling pressure although the EU officials' support of Spain helped the Spanish 10 year yield staying back below the 7 percent level.
The yen also jumped to 12-day highs of 77.50 against the Canadian dollar and 62.91 against the NZ dollar.
The retreat thereafter was a short-lived one and the Japanese unit continued to stay in its ascending track in subsequent trading hours.
Next likely resistance levels for the yen are seen at 77.10 against the loonie and 82.70 against the kiwi.
The yen also tested yesterday's highs against the greenback, pound and the Australian dollar on Wednesday morning in Asia, rising as much as 79.25, 122.99 and 80.72, respectively.



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