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Yen Eases From New Multi-year High Against Dollar 74 days ago
(RTTNews) - The Japanese yen that surged up against its major counterparts in early Friday Asian trading reversed direction around 6:40 pm ET. The yen thus eased from a new multi-year high against the dollar and new multi-month highs against the euro, pound and the franc.
Japan's CPI, unemployment and retail sales reports released today likely influenced the yen.
The Ministry of Economy, Trade & Industry reported that retail sales in Japan dropped 0.9% year-on-year to JPY 10.83 trillion in October, slower than the 1.3% decline in the preceding month. Economists had expected sales to drop 1.6%. This marks the fourteenth straight month in which retail sales have fallen on an annual basis.
Another report from the Ministry showed that Japan's general consumer prices dropped 2.5% year-on-year in October, after a 2.2% fall in prices in each of the previous three months.
Core consumer prices, which excludes fresh food, dropped 2.2% in October from a year earlier, but slower than a 2.3% fall in the previous month. Economists expected a 2.4% decline. This is the eighth consecutive month that consumer prices have fallen.
Month-on-month, overall consumer prices dropped 0.4%, and excluding fresh food, prices fell 0.1%.
Meanwhile, the Ministry of Internal Affairs & Communications reported that Japan's unemployment rate stood at a seasonally adjusted 5.1% in October, down from 5.3% in the previous month. Economists had expected the unemployment rate to rise to 5.4%. The unemployment rate stood at 3.8% a year ago.
Asian stock markets are in a sea of red today, with participants pressing heavy sales in financial stocks amid fears of a likely debt default in Dubai. The U.S. market was closed overnight on Thanksgiving Day holiday. But investors are seen tracking cues from European markets, where stock prices had plunged sharply after Dubai World asked for more time to meet its debt obligations. The mood is so bearish that stocks cutting across several sectors are seeing a fairly massive sell-off.
Japan's benchmark Nikkei 225 index, which plunged to 9,180.5 in early trades, is currently down 169.69 points or 1.83% at 9,211.30.
The yen declined against the US dollar after reaching a new 14-year high of 84.84 at 6:40 pm ET Thursday. As of now, the dollar-yen pair is worth 86.07 and if the Japanese currency weakens further, it may target the 87 level. The pair closed yesterday's New York session at 86.60.
The yen's surge to a new multi-year high against the dollar increased speculation Japan may intervene soon to halt gains in the currency that are threatening the nation's export-led recovery.
Japanese authorities haven't stepped into the currency market since the first three months of 2004, when it sold a record 14.8 trillion yen ($171 billion).
The yen that rose to new multi-month highs of 126.92 against the euro and 139.37 against the pound at 6:40 pm ET Thursday slipped thereafter. At present, the yen is trading at 141.14 against the pound and 128.59 against the euro, compared to yesterday's close of 142.97 and 129.99, respectively. The next downside target level for the yen is seen at 130.1 against the euro and 143.2 against the pound.
The yen climbed to a new multi-month high of 84.30 against the Swiss franc by about 6:40 pm ET Thursday. Thereafter, the yen fell and the pair is currently worth 85.36. On the downside, 86.4 is seen as the next target level for the yen. At yesterday's close, the franc-yen pair was quoted at 86.30.
Investors are now likely to focus on the European session, in which the French consumer confidence, Swiss KOF leading indicator and the Euro-zone business, economic and consumer confidence reports- all for the month of November are expected.
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