Yen Falls Against Majors

08:28, 1st September 2014

(RTTNews) - The Japanese yen declined against the other major currencies on Monday, as traders await key events scheduled for this week such as rate decisions from the major central banks and U.S. jobs data.

All eyes are on the European Central Bank meeting on Thursday, which is expected to provide more cues about the quantitative easing program amid signs of deteriorating growth across the bloc. Traders will watch out the press conference of the ECB President Mario Draghi with regard to how the bank plans to deal with the economic drag in the Eurozone.

Although the Bank of England is unlikely to take major policy action on Thursday, it is expected to be the first major central bank to tighten its policy, ahead of the U.S. Federal Reserve. Economists are expecting the bank to lift rates in early 2015.

The Bank of Japan, which concludes its 2-day meeting on Thursday, is expected to hold its stimulus program unchanged, while maintaining its optimistic outlook on economy. Under its policy framework, the bank targets monetary base expansion at an annual pace of 60-70 trillion yen via aggressive asset purchases.

All important U.S. nonfarm payrolls are due out on Friday, amid signs of accelerating U.S. economic recovery. The jobless rate is seen edging down to 6.1 percent in August, with an addition of 216,00 jobs.

Meanwhile, capital spending in Japan was up 3.0 percent in the second quarter of 2014, the Ministry of Finance said.

That missed forecasts for an increase of 4.1 percent, and it was sharply lower than the 7.4 percent gain in the previous three months.

The yen fell to 104.30 against the greenback, its weakest since January 20. On the downside, 105.00 is possibly seen as next support for the yen.

The yen reversed from early highs of 136.65 against the euro and 113.55 against the Swiss franc, edging down to 137.02 and 113.24, respectively. The next possible support for the yen lies around 138.00 against the euro and 114.5 against the franc.

The yen held steady against the Sterling, after sliding to near a 4-week low of 173.34 in prior deals. If the yen continues its decline, it is likely to face support around the 174.00 region.

The yen moved down to a 1-week low of 87.45 against the NZ dollar, while falling to over a 15-month low of 97.43 against the aussie. Further weakness may see the yen challenging support around 98.5 against the aussie and 88.00 against the kiwi.

The yen, which closed last week's deals at 95.59 against the loonie, weakened to 96.03. Next key support for the yen is seen around the 96.5 region.