Yen Extends Gains Amid Ongoing Conflict In Yemen
March 27 2015 - 04:19AM
RTTF2
The Japanese yen extended its advance against the other major
currencies in the Asian session on Friday, as the ongoing political
unrest in Yemen raised the appeal of safe-haven assets.
Saudi Arabia has launched airstrikes targeting Houthi rebels in
Yemen with the support of its Gulf region allies and the U.S. The
country has been facing a power vacuum from January, when the
rebels staged an apparently successful coup, forcing president Abd
rabbu Mansour Hadi and his cabinet to resign.
Saudi ambassador in the US, Adel al-Jubeir said the military
action was aimed to defend the "legitimate government" of Hadi, who
has taken refuge in the southern port city of Aden.
The news has led to worries about a broader sectarian conflict
in the Middle East, as the Saudis consider the Houthi rebels as
proxies for Iran.
In economic news, data from the Ministry of Economy, Trade and
Industry showed that the value of retail sales in Japan was down
1.8 percent on year in February, coming in at 10.723 trillion yen.
That missed forecasts for a decline of 1.5 percent following the
2.0 percent fall in January.
Sales from large retailers advanced 1.3 percent on year to 1.499
trillion yen - beating expectations for an increase of 0.7 percent
following the flat reading in the previous month.
Data from the Ministry of Communications and Internal Affairs
showed that overall consumer prices in Japan gained 2.2 percent on
year in February, smaller than the 2.3 percent increase expected by
economists and down from 2.4 percent in January.
Core CPI, which excludes the volatile prices of food, added an
annual 2.0 percent. That was also shy of expectations for 2.1
percent and down from 2.2 percent in the previous month.
Also, the unemployment rate in Japan came in at a seasonally
adjusted 3.5 percent in February, in line with expectations and
down from 3.6 percent in January.
Amid uncertainties concerning the U.S. monetary policy and
economic outlook, the JPY has been trading higher in recent
sessions. Since March 24, the yen has gained 1.50 percent against
the euro and 1.60 percent against the Swiss franc.
Thursday, the yen rose 1.05 percent against the euro, 0.47
percent against the pound, 0.25 percent against the U.S. dollar and
0.62 percent against the Swiss franc.
In the Asian trading today, the yen rose to a 4-day high of
123.45 against the Swiss franc, from yesterday's closing quote of
123.67. The yen may now test resistance near the 119.70 region.
Moving away from an early low of 129.85 against the euro, the
yen appreciated to 129.66. This may be compared to an early 4-day
low of 129.49. On the upside, 126.50 is seen as the next resistance
level for the yen.
Against the U.S., the Australia, the New Zealand and the
Canadian dollars, the yen edged up to 119.07, 92.89, 90.24 and
95.23 from yesterday's closing quotes of 119.16, 93.28, 90.50 and
95.46, respectively. If the yen extends its uptrend, it is likely
to find resistance around 116.90 against the greenback, 90.50
against the aussie, 86.87 against the kiwi and 92.16 against the
loonie.
Having fallen to 177.31 against the pound earlier, the yen edged
up to 176.88. The yen is likely to find resistance near the 175.00
region.
Looking ahead, German import price index and U.K. nationwide
house price index - both for February, are due to be released in
the European session.
At 4:00 am ET, Bank of England Chief Economist Andy Haldane will
deliver a speech about socio-economic complexity at the Lorentz
Center, in Amsterdam. Subsequently, after 45 minutes, Bank of
England Governor Mark Carney is expected to participate in a panel
discussion titled "Debt and Financial Stability - Regulatory
Challenges" at the Bundesbank conference in Frankfurt.
Bank of England Deputy Governor Ben Broadbent will deliver a
speech at the Imperial Business School in London at 5:15 am ET.
At 6:30 am ET, U.S. Federal Reserve Governor Stanley Fischer
will deliver a speech titled "The Nonbank Financial Sector: Issues
and Regulation" at the Deutsche Bundesbank Conference titled "Debt
and Financial Stability - Regulatory Challenges" in Frankfurt.
In the New York session, preliminary third quarter GDP data and
U.S. University of Michigan's final consumer sentiment index for
March are due.
At 3:35 pm ET, U.S. Federal Reserve Chair Janet Yellen is
expected to speak about monetary policy at the Federal Reserve Bank
Conference titled "The New Normal for Monetary Policy" at San
Fransisco.
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