Weekly Forex Outlook: Yen (JPY) Advances despite Kuroda Action Pledge

on Nov 5, 2012
Listen

On March 4, the yen rose against its major peers in early trading boosted by renewed Eurozone fears. The euro in turn was dragged down by signs that the Eurozone debt crisis is deepening as well influenced by the comments of an Italian politician that the country may need to hold new elections this year.

**USD/JPY**
On March 4, Bloomberg reported that the yen rose against the greenback (USD) in early trading, strengthening 0.2 percent to 93.37 per dollar as of 6:46 a.m. GMT, and rallying from a 1.9 percent loss in the previous four sessions. The yen was supported on account of its haven status even as the Bank of Japan (BOJ) governor candidate Haruhiko Kuroda pledged that should he be confirmed as the next BOJ governor, the central bank would do whatever was needed to end 15 years of deflation.

Are you looking for signals & alerts from pro-traders? Sign-up to Invezz Signals™ for FREE. Takes 2 mins.

Reuters quoted an unnamed trader for a Japanese bank in Bangkok as saying that Mr Kuroda’s comments were in line with expectations and did not trigger renewed selling of Japan’s currency. “They didn’t contain any big disappointments either.”
Bloomberg in turn quoted Jim Vrondas, chief currency and payment strategist at OzForex Ltd, as commenting that the risk-off environment and uncertainties surrounding Europe were adding to yen demand. “Traders are being squeezed out of positions betting on yen declines and we think this yen strength has longer to run as they continue to unwind positions.”

**EUR/JPY**
The single currency predictably declined early on March 4, with investors expecting that Eurozone GDP data scheduled to be released this week will show that the region’s economy contracted. The GDP figures will add to last week’s bleak Eurozone data pointing to rising unemployment. Reuters reports that the euro has so far today lost 0.1 percent and was last seen trading at $1.3009, close to Friday’s low of $1.2966 set on trading platform EBS, the single currency’s lowest level since December 11.

Bloomberg quoted Alex Sinton, director of institutional foreign exchange at Australia and New Zealand Banking Group (ASX:ANZ, NZE:ANZ), as noting that Europe was faced with “growth numbers that aren’t attractive, unemployment that’s getting worse and the Italian situation which remains unclear”. As reported by Bloomberg, a top aide to Democratic Party leader Pier Luigi Bersani said that Italy may need to hold another election in 2013 after last week’s vote.

**AUD/USD**
The Australian dollar (AUD) was weak in today’s trading, with Bloomberg reporting that the Aussie shed 0.8 percent against its US counterpart to trade at $1.0125. Earlier, Australia’s currency touched $1.0117, the lowest since July 12. The Aussie’s decline was prompted by a report showing that building approvals unexpectedly declined, fuelling speculation of a rate cut by the Reserve Bank of Australia (RBA), which has a policy meeting tomorrow.
!m[Limited Demand For The Euro (EUR) As Italy Edges Closer To New Election](/uploads/story/1553/thumbs/pic1_inline.png)
Bloomberg quoted Jonathan Cavenagh, a currency strategist at Westpac Banking Corp (ASX:WBC, NYSE:WBK), as noting that today’s data continued “to paint a picture of a fairly weak domestic economy,” adding that “some of the softness in the Asian data” was not helping the Aussie either. China’s Purchasing Managers’ Index for services industries fell to 54.5 in February from 56.2 in January, suggesting that the country’s economic recovery might be losing steam. The Chinese PMI data also weighed on the Aussie, with China Australia’s largest trading partner.

Ad

Want easy-to-follow crypto, forex & stock trading signals? Make trading simple by copying our team of pro-traders. Consistent results. Sign-up today at Invezz Signals.

Learn more
AUD JPY Forex