Asian Session – USDJPY extends higher after breaching 100 yen level
May 10, 2013 7:27 am
The main focus has been the US dollar which is outperforming against its peers, breaching the 100 yen level for the first time since October 2008.
The catalyst that propelled the greenback to this four year high was strong US economic data yesterday which helped eased investors’ fears about US economic growth.
Initial jobless claims dropped by 4,000 to 323,000 in the week ending May 4, reaching the lowest level since January 2008.
Helping differentiate dollar strength from the yen is that the Japanese currency is more vulnerable to weakness as a result of the Bank of Japan’s recent aggressive monetary policy measures. At its policy meeting on April 4, the BOJ pledged to pump more money to its economy in order to stimulate growth. This tends to weaken a currency.
USDJPY hit 100.78 in late US trading on Thursday and advanced higher to 101.18 yen in early Asian trading as regional markets also reacted positively to the US data.
EURJPY also extended higher to 131.89, the highest since January 2010, gaining 1.7 percent since yesterday’s low.
The euro however weakened against the broadly stronger dollar, as the single currency is more vulnerable due to the euro zone debt crisis and the ECB proposing further rate cuts.
EURUSD fell to its lowest against the dollar in almost two weeks to $1.3010 yesterday, where it has since been consolidating into the Asian trade.
GBPUSD is also down, reaching a low of $1.5424 after reversing all gains made after news yesterday that the Bank of England left interest rates unchanged at a record low 0.5 percent and maintained the asset purchase program at 375 billion pounds.
The main focus has been the US dollar which is outperforming against its peers, breaching the 100 yen level for the first time since October 2008.
The catalyst that propelled the greenback to this four year high was strong US economic data yesterday which helped eased investors’ fears about US economic growth.
Initial jobless claims dropped by 4,000 to 323,000 in the week ending May 4, reaching the lowest level since January 2008.
Helping differentiate dollar strength from the yen is that the Japanese currency is more vulnerable to weakness as a result of the Bank of Japan’s recent aggressive monetary policy measures. At its policy meeting on April 4, the BOJ pledged to pump more money to its economy in order to stimulate growth. This tends to weaken a currency.
USDJPY hit 100.78 in late US trading on Thursday and advanced higher to 101.18 yen in early Asian trading as regional markets also reacted positively to the US data.
EURJPY also extended higher to 131.89, the highest since January 2010, gaining 1.7 percent since yesterday’s low.
The euro however weakened against the broadly stronger dollar, as the single currency is more vulnerable due to the euro zone debt crisis and the ECB proposing further rate cuts.
EURUSD fell to its lowest against the dollar in almost two weeks to $1.3010 yesterday, where it has since been consolidating into the Asian trade.
GBPUSD is also down, reaching a low of $1.5424 after reversing all gains made after news yesterday that the Bank of England left interest rates unchanged at a record low 0.5 percent and maintained the asset purchase program at 375 billion pounds.
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