Yen Weakens Against Majors

Yen Weakens Against Majors


The yen slipped against other major currencies in early European deals on Tuesday as investors await the outcome of Bank of Japan's policy meeting that starts tomorrow.
Many market participants believe the Bank of Japan will refrain from announcing new measures after the U.S. Federal Reserve and the European Central Bank failed to make significant moves last week.
The Reserve Bank of Australia this morning decided to retain its benchmark cash rate unchanged at 3.5 percent for a second consecutive rate-setting meeting, in line with economists' forecast. While economic growth in Australia is set to remain close to trend, global outlook has become more subdued than was the case a few months ago, Central bank Governor Glenn Stevens said in a statement.
The yen is trading at 78.45 against the U.S. dollar and 97.45 against the euro, compared to yesterday's close of 78.24 and 97.03, respectively. The next downside target level for the Japanese currency is seen at 78.7 against the dollar and 97.8 against the euro.
Against the British pound, the yen is worth 122.60 with 123.0 seen as the next downside target level. At yesterday's close, the pound-yen pair was quoted at 122.08.
Industrial production fell 2.5 percent month-on-month in June compared to expectations for a 3.5 percent drop. The moving of the late May bank holiday to June and the additional bank holiday for the Queen's Diamond Jubilee were likely contributing factors to the month-on-month decline in the production and manufacturing sectors, the statistical office said.
Annually, industrial production dropped 4.3 percent in June. This compares to forecast for a 5.3 percent decline.
The yen that ended yesterday's trading at 80.79 against the Swiss franc is now worth 81.10. If the yen weakens further, it will target the 81.4 level.
Data released by the State Secretariat for Economic Affairs (SECO) showed that Switzerland's seasonally adjusted unemployment rate held steady at 2.9 percent as expected by economists. On an unadjusted basis, the rate came in at 2.7 percent, the same rate as seen in June and matched expectations.
Meanwhile, a report from the Federal Statistical Office said that consumer prices dropped 0.7 percent from a year ago, slower than the 1.1 percent decrease seen in June and marginally below a 0.8 percent fall forecast by economists.
Month-on-month, consumer prices were down 0.5 percent compared to the consensus forecast of 0.6 percent decrease.
The yen also declined against commodity currencies, trading at 83.10 against the Australian dollar, 64.45 against the NZ dollar and 78.60 against the Canadian dollar, compared to Monday's close of 82.68, 64.17 and 78.24, respectively. If the yen slides further, it will target 83.2 against the aussie, 65.0 against the kiwi and 78.9 against the loonie.
Looking ahead, German factory orders for June is due at 6 am ET.
Canada's building permits for June, Ivey PMI for July and the U.S. consumer credit for June are slated for release in the New York session.



More FOREX-news on pages InstaForex.Com