Market Commentary and Intraday News

Japanese Yen Trades Lower On China Stimulus Hopes

279 days ago

(RTTNews) - The Japanese yen fell against other major currencies in the early Asian session on Thursday on hopes that China may take steps to stimulate growth.

Reports suggested Chinese Premier Wen Jiabao was quoted as saying that "downward pressure on the economy remained relatively large and there's growing room for monetary policy operation."

"China still hasn't established a trend of economic recovery," he added.

His comments came in the wake of slew of Chinese economic reports, which indicated that the country's exports, imports and industrial production all weakened and were worse than forecast.

The yen slipped to as low as 81.13 against the franc and 97.42 against the euro, compared to yesterday's close of 80.86 and 97.10, respectively. The next downside target level for the yen is seen at 81.5 against the franc and 98.00 against the euro.

Against the U.S. dollar and the pound, the yen hit a fresh 4-week low of 79.20 and near a 6-week low of 124.23, respectively. The next support level for the yen is seen at 79.5 against the dollar and 125.00 against the pound. At Wednesday's close, the yen was worth 79.00 against the greenback and 123.91 against the pound.

The Japanese yen also slipped against the resource-linked currencies, falling to a 3-month low of 80.14 against the Canadian dollar, 1-week lows of 83.24 against the Australian dollar and 64.00 against the NZ dollar. On the downside, the yen may find target at 80.5 against the loonie, 84.00 against the aussie and 64.5 against the kiwi. The yen ended yesterday's deals at 79.86 against the loonie, 83.00 against the aussie and 63.77 against the kiwi.

The manufacturing sector in New Zealand slipped unexpectedly into contraction in July, the results of the Business NZ Performance of Manufacturing Index today - showing a score of 49.4.

That's down from the revised reading of 50.0 in June, which was originally pegged at 50.2.

Looking ahead, U.K. retail sales and Eurozone CPI for July, Switzerland's ZEW survey expectations for August are due in the European session.

The U.S. building permits and housing data for August, weekly jobless claims for the week ended August 11 and Canada manufacturing shipments for June are expected in the American morning session.

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